It should be remembered that no credit obligation is closed for life and is not irreversible and that if the creditor and its conditions do not meet the borrower’s wishes and requirements, it can be changed by refinancing the loan.
Loan refinancing (reaccreditation, re-crediting, re-crediting, credit buy-out) drawing up credit commitments on the basis of a new creditor on a new basis or settling a loan with a new loan. The purpose of refinancing any loan is to obtain more favorable credit terms and reduce the total cost of the loan.
Refinancing is one of the things that can be said about weapons in the fight for the welfare of borrowers. Loan refinancing is used in a number of cases, but the most common reason for refinancing is a situation where, under a credit obligation, it is found that a different creditor has more favorable credit obligations based on the same rules. For other reasons for refinancing a loan, the following situations should be mentioned
The creditor does not agree to modify the terms of the contract
The creditor does not agree to modify the terms of the contract, apply a disproportionately high commission fee for the amendment of the terms of the contract, significantly increases the interest rate; The borrower wants to change the terms of the credit agreement, such as the amount of the credit for the SMS credit, the maturity of the loan, the type of interest rate, etc., but the lender offers them on the basis of unfavorable conditions. The creditor shall unanimously change the interest rate on the loan by voting on the terms of the previously concluded agreement.
The borrower has suddenly encountered financial problems with repayment of the loan
The borrower has several credit liabilities to different lenders and wants to combine them, thus reducing and simplifying credit payments. The review of loan refinancing options includes indicators such as borrowers’ income, other credit liabilities, and credit history. Refinancing is actually a new form of credit, so it is subject to all the same rules that apply to new credit. Based on the borrower’s compliance with the terms of the lender, the refinancing of the loan is carried out or not.
Refinancing credit in most cases makes it more profitable, but it should be noted that refinancing itself also costs money, which can reach several hundred euros and which, moreover, has to be paid immediately, so this aspect must be taken into account before refinancing.
Refinancing is only to be paid to the previous
It should also be mentioned that refinancing is only to be paid to the previous, but not the new, but the new lender will have to pay for the services that are usually charged in case of a credit. You should not immediately rely on the fact that refinancing is always beneficial, and not about refinancing, but to assess the cost of credit on the basis of the new rules, and to assess whether the creditor does not offer any further bonuses with refinancing.
It is always advisable to try, as far as possible, During the refinancing, the tripartite agreement is concluded – between the borrower and both, the previous and the new lenders, because the borrower is given a loan or part of the loan that he has to repay to the previous creditor. Refinancing usually takes about one month.