You have repeatedly heard of refinancing, but not always this procedure helps borrowers on a loan to get out of debts and overdue. It often happens that, having posed on the banks in another bank, the client believes that it receives favorable conditions with which he can easily pay the remaining part of the debt. And when this does not happen, the borrower does not understand where he made a mistake, and why the refinancing did not help him.
The result of an increase in the term of the loan agreement will be a decrease in debt burden. This version of refinancing is relevant only if the loan has to pay a very long time. For example, if the term of the loan agreement expires less than a year, then such a function for the borrower loses its meaning, since the benefit will not be so significant, but it will not work out of the debt pits. If the loan term is more than 1-2 years, then in this case the increase in the term of the loan agreement acquires the meaning.
Let’s consider the situation from life
Imagine that you have previously taken a loan in one of the banks of the country with a percentage rate of 11.5%. You managed to pay it up to a certain point. But there were problems when by the end of the loan payment remained only 2 years. The residual amount of debt is 800 thousand rubles.
Or, for example, another bank may offer a percentage rate below former, admit 9.8%. With the same amount of debt and an increase in the term of the loan to three years, the monthly payment will decrease by as much as 11,733 rubles.
In this case, the loan overpayment will increase by 27,259 rubles, but if you take into account a huge difference in the amount of the monthly payment in the new interest rate, it is safe to say that the game is worth the candle. This will definitely help you cope with difficulties in paying credit payments.
Imagine that you have issued several loans in different banks, or in one. And now you experience great difficulties with the fulfillment of obligations for each loan agreement.
By combining all credit products in one, you can benefit, which will allow you to resolve financial difficulties with payment. Let’s go right away for example:
You have 2 credits: a mortgage, decorated in the interest rate of 11% per annum with a debt balance of 500 thousand rubles for a period of 3 years. In this case, the monthly payment is 16 369 rubles. And the consumer loan once decorated under 12% with the balance of money in the amount of 300 thousand rubles and the monthly payment — 14,112 rubles. The term of the credit agreement on the consumer loan is two years.
Total per month, you spend 30,481 rubles to pay for all your loans, which is currently an unbearable debt burden with which you can not cope. Then the bank invites you to combine loans in one under a more profitable percentage, for example 9.5% for three years. Now the total amount of debt and remains 800 thousand rubles, and the monthly payment is 25,626 rubles. The difference after refinancing is 4,855 rubles per month.
Reducing the amount of the monthly payment makes it possible to reduce the load, and also allows you to pick up the mortgage from the bank to the apartment and become a full owner of the housing.
The decline in the interest rate is the basis of refinancing. So that it significantly helped you in a problem with paying a loan, the difference between the initial interest rate and the new should be at least 3%. Only in this case you will feel the benefit and the refinancing process will not be useless.
For example, you have a loan, the balance of which is 550 thousand rubles. Initially, the loan design took place at a rate of 15.7% per annum. And the term of the loan agreement will end in three years. The monthly amount of payment is 19,555 steering. The bank offers you refinancing under 11.5% per annum for the same 3 years. Then your monthly payment will be 18,137 rubles, which at first glance is slightly. But if you calculate the difference in overpaying the total amount of debt, the figure will seem more attractive — 40,255 rubles.
In conclusion, we want to add that the refinancing of the mortgage agreement under a loan without mortgage property will help you withdraw imported real estate, which will allow you to freely manage the ownership of the Council — including the sale in order to obtain funds to repay debt obligations to the bank.