Refinancing loan – for whom, on what terms?
The refinancing loan is granted by the bank, and the entire process of applying for such a product is identical to any other credit procedure. When analyzing the application, the creditworthiness of the potential borrower and its reliability are examined. This means that the analyst or other person issuing the credit decision will assess the scoring, analyze the credit history based on the Retro report ( check how to download the report yourself ), can also reach the National Register of Debtors and determine the status of the customer in the BIG system. This is to verify and assess the financial risk that will be associated with the granting (or refusal) of a refinancing loan. The final loan amount and associated costs that the bank can offer depends on the result of this analysis. Usually it is individual and may depend on seemingly small, banal issues. When applying, you will need to determine the amount of the liability currently held by providing the appropriate document for the remaining amount. You also need to be prepared for the fact that we may be asked for a document reviewing the current loan service at a competitive bank. We can refinance both mortgage and cash loans. When financing, if the borrower has not applied for additional funds, he will receive a loan of the same amount as before.
Usually the same procedure is followed when applying for a refinancing loan. However, due to slightly greater flexibility and a more liberal approach by loan companies to people with a bad credit history in Retro by loan companies – there may be a higher probability of receiving it. Nevertheless, for people who have financial difficulties with servicing the existing obligation under the loan agreement, taking advantage of the offer of a competing loan company may prove to be a solution to the problem and result in lower installments and better conditions. Statistically, the offers of loan companies are most often used by people with lower Retro scores and unstable sources of employment. Loan companies are subject to different legal regulations than banks, which is why they can afford a slightly higher flexibility, which, however, may prove to be too expensive in some cases. This is understandable procedure: the loan company agrees to a refinancing loan (more precisely, a refinancing loan, because, as a rule, in Poland loans are granted by banks, while loans are granted by non-bank institutions), often even in the case of customers with problems in repayment obligations, delays in bases or a less stable source of income. In return, however, valuing your risk of such financing quite salty.
How refinancing works
When receiving a refinancing loan or loan, the borrowed sum repays the previously indicated obligation and finally closes it. This means that henceforth the new bank or lending company will become the creditors of the liability, the old loan is completely closed and the collateral released (if, for example, the mortgage was the collateral). In the case of refinancing of mortgage loans, this is followed by an entry in the fourth section of the land and mortgage register by a new creditor. A well-matched refinancing loan in practice means a lower installment and the same or similar loan term. People who mainly want the installment of their current liabilities to be lower or who want to change their creditor for other reasons should be satisfied when they receive a refinancing loan.
The credit expert advises: Before signing the documents, carefully read the provisions of the loan agreement or loan agreement. What you need to pay special attention to is:
- commission for a new bank for granting a loan,
- total cost of credit / loan,
- the amount of any additional transaction costs,
- possible fees for early, early repayment – this is particularly important in the case of mortgage loans, where the fee for early repayment may amount to even several thousand zlotys.