31.08.2022

HOW TO REFINANCE A FAST LOAN?

Refinancing a loan is a replacement of the current loan with a new one, with the aim of achieving more favorable conditions for the borrower. Through refinancing, the size, term and interest rate of the loan can be changed. You can take out the refinancing loan from the creditor company or turn to another institution for help.

Benefits of refinancing

Quick loans can also be refinanced. If you have several quick loans and are having difficulty covering them, refinancing can help you deal with your obligations as "painlessly" as possible. Thus, you will service only one monthly bill and improve your credit file, which will provide you with access to bank lending.

By receiving an additional amount of money, you will increase your available monthly budget and reduce the total amount with which you have paid off the loan installments so far. Other advantages are an extension of the repayment period, only one installment payment date and moving your loan to another credit institution more convenient for you.

If you have several small, high-interest payday loans and/or payday loans from different financial institutions, consider consolidating all of your debts into one. This way you will get rid of the weekly installments, keeping track of different due dates, the constant phone calls and home visits. It is possible to reduce the current installment, as well as the total amount due on all obligations.

Bad credit refinancing

If you have current arrears and late payments in previous years, you most likely have bad credit. Usually, banking institutions are extremely strict in evaluating customers, and it is often very difficult for people who do not repay their loans on time to regain their trust.

In case of arrears exceeding 30 days and for overdue amounts exceeding BGN 200-300, difficulties arise. Only if there is an objective reason for such a delay, the new bank would agree to grant a loan, but under a number of conditions. You must first prove that the delay is accidental or the result of a specific objective reason.

An alternative to banks are financial institutions that fight for more customers by offering more and more favorable terms for quick loans. If you are going to use the services of microfinance organizations, find out exactly where you will get the most profitable loan. These companies are usually loyal to their customers and even a person with bad credit can get financial help.

To consolidate obligations or for larger loans, you will most likely have to turn to loans with additional collateral, a pledge or additional guarantees. The loan is granted only on the basis of the collateral provided, without considering the Central Credit Register. Interest rates are higher, but financing with bad credit history is allowed.

Expert advice on profitable refinancing

Refinancing a loan is not much different from applying for a quick loan. You can go to the office of a company of your choice or apply for loan refinancing entirely online. An application form is filled out with the amount you need and your ID card details. You should choose the number of installments so that you can be sure that you will manage to repay your monthly installments.

Refinancing a loan is an important decision and you should not rush when you decide to take this step. Worry and haste can play a bad trick on you. Before you sign the fast credit refinancing agreement, you should read its clauses very carefully. If there is something you do not understand, better ask a consultant from the company before signing the refinancing contract.

You should carefully calculate the amount of the new loan you will need, choose the type of interest - fixed or variable, familiarize yourself with the fees, as they add to the cost of the loan. It is especially important that there is no early repayment fee, as well as other additional costs and commissions.

Refinancing a loan under unfavorable conditions is one of the most common mistakes in this financial transaction. Don't agree to a repayment term that you know in advance or think you won't be able to meet. Do your best not to delay paying installments when refinancing. Even though you are at a disadvantage, don't hesitate to negotiate the terms.