Is it Possible to Save on a Loan?
If! And it is possible to save not only money but also time. This article will briefly look at how to save by refinancing your loan with a bank or with a non-bank lender.
What is re-accreditation?
Recrediting is the “transfer” of a loan to another lender. For example, if you have a loan in bank “A”, you can transfer it to “B”, which will repay your loan in bank “A”, while you will get a better credit at bank “B”. This is possible because the loan can be repaid free of charge before maturity without paying interest. Similarly, re-crediting or credit consolidation is possible if you have several small loans with multiple lenders.
When to choose re-accreditation?
For example, loans taken during the economic crisis often have huge interest rates compared to current times, especially if they are taken at a fixed rate. This means that huge amounts are paid in interest payments. However, re-crediting can reduce interest payments. Likewise, credits may be re-credited or combined when there are multiple loans from different lenders. Tracking them can be quite time consuming, moreover
How to recredit?
If you have several loans with service providers (lenders) that are members of the Association of Alternative Financial Services, you can find out about the possibilities to combine loans on the website of this association. It is also possible to combine loans on your own – for example, if you have several loans with non-bank lenders, take one consumer loan at the bank and use it to repay the remaining loans, continuing to repay only the consumer loan.
Conversely, in the case of mortgages or other loans, such as student loans, you should inquire about competing banks with competing banks, which will offer you a free rate on the credit. Keep in mind that lower credit rates will not always mean lower costs, since over-crediting will require you to pay a large portion of the fees you paid when you first took out the loan – the contract may require a reassessment of the property, etc.
In other words, the spear is not small and you have to look not only at the difference in interest rates between the new and the old loan, but also the fees so you are sure that when you switch to a new lender, you save and not lose money – and, also that it can be a time consuming procedure.