Refinancing a loan in Bank for individuals in 2018

Credit conditions change every year. It is almost impossible to predict in advance which direction the interest rates on loans will go. This is influenced by a sufficient number of factors. But in many respects, bank rates are being cartelized with a fixed refinancing rate from the Central Bank. In this regard, the borrower, who, say, issued a mortgage 2 years ago, may have a large overpayment under the contract than with the current situation in the lending market. This raises the question of refinancing a loan. This article will look at how to refinance loans at Bank, what requirements and conditions the company puts forward, how profitable it is, and why we recommend using this opportunity.

Terms of refinancing a loan in Bank

Terms of refinancing a loan in Bank

Refinancing – the possibility of registration of a loan agreement in the bank in order to repay the debt on current loans. This service is a commercial course of banking organizations to attract customers. And it can be very profitable as a financial company, and the borrower.

Using refinancing, you can improve the current terms of the contract. The program is provided by many commercial banks, including Bank. In essence, this is a type of consumer lending.

In the case of Bank, the client draws up a loan agreement with this company, which undertakes to close loans in other banks. The borrower receives new, more favorable conditions, and Bank has a new client.

For example, the current loan has a monthly payment of 5,000 rubles in VTB 24, as well as an agreement with OTP Bank with a payment of 7,500 rubles. The loans were issued at high interest rates, and by reducing the overpayment and reducing the rate, Bank proposes to repay both contracts by combining them into one with a mandatory payment of 10,000 rubles.

This is indeed possible, and refinancing is currently a popular program. Consider the terms of refinancing a loan in Bank for individuals.

Rate 13.5%
Amount, rub. 30,000–3 million
Term of the contract 3 months – 5 years

Bank does not require to provide guarantors or execute collateral agreements. Considered an application within 2 working days from the date of the package of documents. After making a positive decision by the bank, the client will have 30 days to arrange the transaction and receive financing. 

The banking company provides a payment schedule that is annuity in nature, i.e., monthly contributions are equal to each other, except for the last payment. At the same time, the amount of interest that is included in the monthly payment depends on the size of the principal debt and the interest rate. Therefore, the first payments are “the most expensive” for the client, since most of the funds contributed go to closing interest, and the remaining amount is written off to reduce the loan body.

Money is written off on the date indicated in the schedule, at the same time in the amount that was fixed when drawing up the contract. The exception is the first month from the date of registration, because according to the legislation during this period, the borrower can return the entire loan amount or part thereof without prior notice to the lender.

In the future, in order to write off the amount more than indicated in the schedule, you must notify Bank. This can be done through a personal account or by writing a statement in the office of a banking company.

By making a partial repayment, the client saves overpayment on the refinancing agreement. Bank does not charge an early repayment fee and does not set minimum amounts for such a transaction.

It is worth paying attention to the fact that if the borrower admits arrears, the bank has the right to charge a fee of 20% per annum on the amount of the delay on a daily basis.

Re-crediting of legal entities is possible under several refinancing programs:

  • business turnover;
  • business investment;
  • loan “Business-real estate”;
  • credit “Trust”.

Business turnover is provided as a refinancing of loans that were granted to replenish working capital. Such lending can be used for a number of events:

  • replenish working capital;
  • purchase raw materials, consumables;
  • pay off debts to other banks;
  • buy goods;
  • make current expenses;
  • to make contributions to the tender. At the same time there is no need to provide real estate as collateral.

Tariffication for this product is given in the table.

Term, months 1–48
Interest rate 11.8%
Deferment of payment, months 6
Available amount, rub. 3 million and more. Determined individually, no upper limit

The specified interest rate is indicative, it, as well as the amount, is determined directly taking into account the financial situation of the borrower. As a security for loan commitments, Bank accepts a pledge, a guarantee of individuals and legal entities, as well as guarantees from the Agency for Credit Guarantees Agency. 

A business investment is a program that allows you to receive financing for investment activity or modernization, equipment repair, and borrowers are also entitled to refinance previously issued loans.

Term, months 1–120
Interest rate 11.8%
Deferment of payment, months 12
Available amount, rub. 3 million and more. Determined individually, no upper limit

As in the previous product, the bank will require to ensure the transaction under the same conditions. Property pledged is subject to insurance. If the customer is in arrears, the banking organization charges a penalty of 0.1% of the amount of the overdue debt on a daily basis.

Business real estate allows you to refinance loans that were issued for the purchase of real estate. The terms of the contract are presented in the table.

Term, months 1–120
Interest rate 14.28%
Deferment of payment, months 12
Available amount, rub. Minimum amount: for agricultural firms – 150,000.

For other customers – 500,000.

The maximum loan size depends on the region – ranging from 200 to 600 million

Loans are issued when making a down payment – 20% for agricultural firms, 25% for other companies. At the same time, in terms of on-lending, when real estate acts as collateral, there is no need to pay the down payment. Pledge may be:

  • purchased property;
  • equity participation in construction;
  • real estate company;
  • bail;
  • guarantees.

Bank does not charge a fee for issuing a loan and sets a moratorium on early repayment.

The Trust credit is another way to use financing to close current debts to creditors.

Term, months 6–36
Interest rate 16.5%
Deferment of payment, months 12
Available amount, rub. 100,000 – 3 million

In the case of an individual entrepreneur, an individual may act as a guarantor. For companies, the guarantor can be a business owner.

How profitable is refinancing

How profitable is refinancing

 

Consumer lending market is constantly changing. Bank offers depend on the refinancing rate set by the Central Bank. Only in the last 2017, it was reduced from 10 to 7.75%. According to experts, in 2018 a positive trend is expected for a reduction in the key rate.

This means that banks will have to continue to improve lending offers for both individuals and legal entities. Consider whether it is profitable to refinance the loan, and note the positive aspects in this procedure.

  1. Rate reduction. The lower the interest rate on the contract, the cheaper it will be for the borrower to maintain the contract. Thus, it is possible not only to save on overpayment, but also to reduce monthly payments.
  2. Monthly payment. There are situations when the amount of monthly contributions becomes uncomfortable for the borrower. In this case, it makes sense to try to reduce the credit load. This is feasible through refinancing. By increasing the term of the loan agreement, monthly payments become less.
  3. Terms of payment. As a rule, when applying for a loan, the borrower first of all draws attention to the figures characterizing the amount to make payments. In this case, you can miss the moment about exactly how the bank accepts payment. It may be necessary to deposit funds through third parties with a commission, which ultimately leads to a rise in the cost of the loan. Bank may offer more acceptable terms for crediting money without commission.
  4. Insurance. Insurance products are additional services that often involve lending. In this case, the return of the insurance premium depends on the conditions and rules on which it operates. One of the possibilities to return the money for insurance can be the early closing of the loan through on-lending.

If we consider specifically Bank as a lender to repay an existing loan, we can single out the following advantages:

  • rate of 13.5%. In conditions that in the consumer lending market the rate varies from 20 to 35%, the banking offer from Bank can be very relevant;
  • credit consolidation. Bank provides the ability to repay up to 5 credit agreements by combining them into one. This will allow making monthly payments on one schedule and only in one bank, which will reduce the risk of payment error and will allow you to maintain your credit history properly;
  • additional funds. The borrower has the right to use the financing not only for closing the loan, but also for obtaining additional funds that can be used for his own purposes.

Making refinancing in Bank, you can not worry about penalties for misuse of funds. The bank company will not require any certificates confirming that payments were made under existing contracts, and ask the client to provide certificates of closure. 

But we recommend to receive in any case documentary evidence of the performance of debt obligations, since on the basis of a certificate a borrower can be sure that in the future the lender will not present fines or penalties for an overdue loan. Also, the advantage of refinancing in Bank for individuals lies in the fact that it is not necessary to search for guarantors and offer personal property as a pledge.

As for business lending, then much depends on the target program and on what exactly the financing is planned to be used, since, in addition to refinancing a loan, the borrowing organization can receive additional funds for the development or modernization of the company. Highlight the main advantages:

  • closure of debt obligations to creditors on more favorable terms;
  • deferment of payments up to 12 months;
  • business financing for investing in the means of production, scaling or replenishing working capital;
  • individual approach to each organization;
  • possibility of lack of collateral.

Requirements for borrowers

Requirements for borrowers

 

Refinancing a consumer loan in Bank can be classified as a simple loan. In terms of the borrower, the bank puts forward standard requirements for its customers. Creditor must meet the following standards:

  • age from 21 to 65 years. It should be borne in mind that the upper age limit is formed in such a way that 65 years old must be fulfilled no sooner than the expected contract period of the original payment schedule;
  • current work experience in the last place should be more than six months. At the same time, it is necessary that the total official employment experience exceeds one year in the last five years.

There are also some amendments for a certain category of borrowers. For example, persons who receive a salary on a Bank card are not subject to the five-year work year rule. It is enough for them to be employed for 6 months at the current place.

The program of refinancing consumer loans in a separate category distinguishes retirees. For them, the total work experience for 5 years should not exceed one year, but six months. In addition, bank underwriters intend to check the client’s solvency.

Potential incomes and expenses of the borrower are taken into account, and experts determine how much the client will be able to provide monthly payments. According to generally accepted rules, on average a monthly payment should not exceed 40% of the client’s income. The indicator is quite variable and subjective, but you can focus on it.

Also checked credit history. If the borrower fulfills credit obligations in bad faith and misses payments, especially during the last 6 months, the probability of refusal to lend increases.

As for legal entities, much is decided on an individual basis. Therefore, in order to clarify the possibility of refinancing, we recommend to contact by phone or in person in the office for more detailed advice.

Bank highlights some general conditions:

  • revenue for the year should exceed 400 million rubles. But under the Trust program, it may even be less than 60 million rubles. This service is also aimed at individual entrepreneurs;
  • the company must be registered in Russia;
  • The term of activity depends on the direction of the business. So, for firms operating in the field of trade, it must be more than 3 months. For others – 6 months. Organizations that are inherent seasonality to get refinancing, you must have experience of successful work of 12 months.

The bank is ready to cooperate with an individual entrepreneur aged from 23 to 65 years, with registration in the country. If it is temporary, then it should not expire in the next six months. It is necessary for the business to exist for at least a year and for the last reporting period there were no unprofitable indicators. The bank also requires that the company did not have debts to budget organizations.

Requirements for refinanced loans

Requirements for refinanced loans

 

The purpose of the refinancing program for the borrower is to improve the terms of the loan agreement. Bank is ready to cooperate with any banking organization in Russia. Thus, the client can pay off his debts and get more favorable conditions. Consider which loan can be refinanced at Bank:

  • car loans;
  • credit agreements for the purchase of goods;
  • bank loans in cash;
  • credit cards;
  • overdraft cards;
  • consumer loan agreements in Bank and auto loans issued in Bank, provided that they are refinanced with a loan from a third-party bank.

With car loans, debt is paid off, and transport acts as collateral, which goes to Bank. After the loan is closed at Bank, the encumbrance is removed from the car, and the owner can perform registration actions at his own discretion.

Consumer trust and non-target contracts are also refinanced by Bank. The bank allocates money to close the debt of a loan by bank transfer. The client must independently verify the fulfillment of obligations under the over-credited agreement.

In the case of credit cards, it is necessary to clarify the amount sufficient to replenish the card account in order to repay the debt. At the same time, it is not necessary to close the card agreement in a third-party bank. Bank issues a consumer loan, which must be paid according to a schedule. For payroll clients, a banking company provides certain loyal conditions.

In the same way refinancing of cards with overdraft is made. These are debit products for which there is a certain limit, when the client can “go into the minus” at interest, stipulated by the contract.

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