Loans have long been a part of our lives. We no longer imagine buying a flat, a car, travelling or any household appliances without taking loans. It is credit that allows you to have what we want today and gives you the opportunity to pay a fee gradually. Many of us have one or more loans, even those quite unique such as Cashfloat It is already difficult to find a person who has never used it. But what if you borrowed different loans in different banks such as HSBC, Santander and Lloyds for different interest and terms and it would be much more convenient to have one? What if you find it difficult to pay the loan every month? Or do you want to change the currency in which you took the loan? Refinancing a loan can be a way out of the situation.
What is credit refinancing?
Refinancing or is a complete or partial repayment of an existing loan, at the expense of a new one, but on more favorable terms. You can ask to refinance your loan or any other bank offering this service.
General conditions for refinancing
Terms can vary depending on the bank, as well as proposals change and there are periodic special programs and choosing a profitable offer is not easy. There are several common points that you should pay attention to before deciding on on-lending:
– the terms for consumer credit do not exceed 5 years and for mortgages – 30 years;
– depending on the creditor, fees for certain services are possible.
– you will need the same documents as when you are making a normal loan, as well as help and the current status;
– the interest rate on a new loan may depend on the bank, special programs or your personal history;
– the loan to be closed should be issued more than 6 months ago. In rare cases, this indicator may decrease to three months.
– usually banks promise to consider the application in the shortest possible time; nevertheless it is different for all.
How is the process of on-lending going on and what is needed for this?
In fact, when refinancing a loan, the borrower is subject to the same requirements as when initially formalised. The new creditor bank will reevaluate your solvency and credit history, as well as all information about the current loan.
Let’s consider the process of on-lending step-by-step
– You draw up a new loan in your own bank or in another bank, whose proposal seemed to you profitable. At this stage you will have to prepare all the necessary documents for the new loan. According to the information received about your financial situation, the bank will issue its verdict.
– If you decide to change the bank, it is necessary to obtain an agreement from your operating bank to refinance with another lender.
– If both banks decide in your favour, you sign the contract. From now on, your new lender takes care of himself to pay off your old debts and solves all organisational issues.
– To make the right decision, it is necessary to know what advantages and what pitfalls can conceal in itself on-lending.