Refinance loans are often referred to as simply lending. This design of a single loan with a view to closing existing or more available. The product has a special purpose. That is, the money in his hands during the refinancing borrower does not receive, they are sent directly to the repayment of existing loan debt.
More and more banks began to offer lending services. Gradually themselves borrowers began to understand the essence of the refinancing, and that it could have a beneficial impact on the repayment of credit debt.
other banks refinancing loans Goals
Possible objectives of debt refinancing:
Reducing the effective interest rate. Let's say you took a loan without prior reference rate at 40% per annum. And now you have the opportunity to provide an income statement. Then you can apply to your chosen bank providing refinancing other banks loans services. As a result, your rate may be, for example, 25% per annum. As a result, the final overpayment decrease.
The increase in the loan repayment period. If the payment of the loan for the borrower has become burdensome, you can refinance to stretch payment terms. For example, initially you had 2 years to repay the loan, and after the term began to be 3 years. Accordingly, the amount of the monthly payment is reduced, the debt burden on the borrower's weakened.
Removing the encumbrance with pledge. Let's say you made out a car loan, in which the vehicle remains pledged to the bank. Encumbrance is removed only when full payment of the loan. Then you arrange refinancing, and your car loan is converted into a simple cash loan. The previous loan closes due to the new in another bank, the encumbrance is removed.
Replacing the currency of the loan. Recently, due to currency fluctuations it has also become topical.