How to repay a loan with a loan? Take a loan from the bank. Is it possible to repay the loan ahead of time

Modern life is a cycle of circumstances that can greatly disrupt well-designed and constructed plans. The problem of the emergence of any financial issues over the past few decades, modern people are used to solve in banking institutions. The citizens have the opportunity to borrow money for the purchase of real estate, cars, household appliances, furniture and other goods that are necessary for a normal existence. Lending is also provided for the purchase of building materials, the solution of business problems, treatment, rest, study and other needs. Take a loan in the bank can every citizen who has a good credit history and a permanent income. To get any type of loan is easy enough because a large number of credit programs are thought through in the banking sector, which, like a wand-rescue wand, helps solve the flow problems. Clients of banks often do not even think about the fact that there can be situations in the event of which repayment of debt becomes a problem.

What can affect the possibility of making mandatory payments

The reasons for the appearance of complexities are mass. They can be:

• Loss of work;
• disease;
• A jump in the exchange rate;
• Death of one of the members of the family;
• One of the earning members of the family will become unemployed;
• negligence;
• The emergence of other life problems that led to financial losses.

Possible problems with non-payment of a loan

Non-payment of compulsory payments on the concluded loan agreement draws a sequence of additional problems. Everything begins with calls from bank employees, then letters of complaint from the management of the banking institution, legal action, employees of the executive service appear at the address of the debtor's residence. And, worse, threats from special services are coming. Intimidation of unscrupulous borrowers is becoming one of the popular ways of requiring borrowed funds. In addition, credit bondage also provides for a penalty for non-repayment of debt and bank penalties, which several times increase the total amount of debt. One option for getting out of this situation, according to experts, is borrowing funds to repay the amount taken. To find the answer to the question "how to repay a loan with a loan," you need to know some important information. There is a term in banking legislation that means a full repayment of borrowed funds on the basis of a new loan in a bank. If you understand in fact, in the process of refinancing or on-lending, you need to take a loan to pay off another loan.

Main advantages of on-lending

1. Refinancing helps the bank's clients get out of bondage problems with finances, correct mistakes made earlier.
2. This method of repaying a loan actually increases the repayment period without any financial loss.
3. On-lending allows the borrower to significantly reduce his mandatory monthly payment when paying the debt to the bank.
4. If you study all the credit programs of the country's banks well before taking out a loan to repay the loan, you can even reduce the principal amount of the debt.
5. Refinancing avoids accrual of fines and penalties for non-repayment of principal.
6. This option of payment of debt helps to avoid litigation, which requires a lot of time and nerves.
7. Before you repay a loan with a loan, you can choose the bank with the most favorable terms.

What you need to pay attention to before the conclusion of the contract of refinancing

Before you repay a loan with a loan, you must carefully examine the primary loan agreement. Banking policy provides for special programs that contribute to the repayment of debt through an additional loan. Often the possibility of on-lending is spelled out in the contract itself. It occurs after a certain amount of time has elapsed. In each bank, the period that must pass before concluding the refinancing contract is different. On average, its duration is six months, but other options are possible: three months or a year. The management of the banking institution is interested in repayment of the borrowed amount, so the terms of the loan program provide an opportunity for debtors of the bank to cope with the established payments of debt by reducing interest on the main body of the loan, extending the loan period and other loyal programs.

It is necessary to carefully read the contract, before quickly repaying the loan

Refinancing is not suitable for all loan agreements. Rather for some of them, this way of paying off debt does not matter.

There are some programs of banking institutions that do not allow the repayment of the loan body ahead of schedule. Therefore, it is necessary to clarify this possibility before signing the documents. Bank employees argue that there are credit programs that do not provide for changes in the schedule of debt payments. In such cases, the refinancing agreement does not make sense. Moreover, there are banks that have a commission for early repayment of the loan, so these details need to be clarified. In 2011, legislation prohibited the use of this method of calculating interest, but they still occur as one of the types of hidden commissions.

Is it possible to repay the loan ahead of schedule and what are the advantages of early repayment?

Early repayment of debt has many advantages. First of all, they concern the psychological state of the debtor. When the borrowed amount is fully given, the person feels much more comfortable and free. If you analyze the payments, the early repayment of the loan automatically reduces the amount of the borrower's principal debt by reducing the amount of accrued interest. An important plus of debt repayment is also that the money saved can be invested in a profitable business, rather than paying the bank. Early repayment of the loan in most cases is beneficial for customers, but not for banking institutions. They lose unpaid interest on loans on early repayment. Until 2011, in many banks in general, there were various commissions and fines in large amounts for the previously paid debt. Now the legislation has improved the terms of lending money borrowers, but the moratorium for a period of six months, a year or at least three months for early repayment still exists. To clarify the duration of the ban in each bank, you can in the loan agreement even before you repay the loan ahead of schedule.

Refinancing of consumer loans

Consumer loans are taken for a period much less than larger debts, but at the same time they are not very profitable for the family budget. Perhaps you saw the interest rate on loans, which is much lower than in your bank, which may be an incentive for refinancing. Often it decreases after some time. This can be considered a risk of the borrower, who borrowed the amount on less favorable terms. For example, your loan was issued by Privatbank. How to repay a loan in advance in this financial institution, it is necessary to deduct in the loan agreement. If it is possible to refinance on more favorable terms, then to reduce the interest rate it is enough to issue simply a standard package of documents. If you decide to take a new loan from another bank, you will need to collect additional documents.

On-lending to auto loans

Before quickly repaying a loan to buy a car, you need to collect an additional package of documents that relate to the car and the current loan. This package of documents depends on the purpose of concluding a refinancing contract. If you make out a loan for the purchase of another car, then the procedure for registering the contract requires the sale of the first car in the cabin. The money will be the initial contribution under the refinancing agreement. But in any case it is necessary to conclude a new insurance in which the beneficiary will be indicated by another bank.

Take a loan from the bank to pay off the mortgage debt

This type of on-lending is considered to be the most difficult for registration, it requires the presence of additional documents relating to the real estate object for which the loan was taken, the payments made, the balance of the loan and other details. At the same time, it is necessary to conclude a new insurance contract with the indication of a new bank, make an appraisal of the real estate at the moment and re-register the real estate. Re-registration of a new mortgage contract will entail additional significant costs, they will be justified under more favorable lending conditions only if the amount of the unpaid mortgage body is large.

Additional package of documents and conditions for refinancing in other banks

Before repaying a loan with a loan, borrowing money from another bank, you need to collect additional documents for its processing. In addition to the standard package, for registration of the transaction it will be necessary to collect references that characterize the state of the current loan.

1. Before prepaying a loan for the purchase of real estate or a car by borrowing funds, you must show a previously signed loan agreement.
2. Prepare a debt repayment schedule with an indication of the amount of monthly mandatory payments.
3. If additional contracts are concluded under the current loan (contract of commission, pledge), then the originals of these agreements must be presented when a new loan is issued.
4. In the bank to which you owe money, take a certificate of the balance of the debt.
5. If the refinancing is to be a large amount (it is indicated in each bank), it will be necessary to make an additional guarantee agreement for at least one individual.