Loans available for refinancing of existing debt are available in two models.
The first is that the loan company provides us with new financing to pay off the debt incurred earlier. It is basically a standard loan, but its purpose is not arbitrary.
In the second, the lender “sends” us to a cooperating entity that specializes in this type of services. In this case, after paying the commission, the money from the refinancing loan goes directly to the account of the institution to which we have an obligation.
It should be remembered that when we support us in settling the debt in the first company, we automatically become the debtor of the second institution.
Commission for refinancing – what does it depend on and how much is it?
As in the case of extension of the repayment date, also in the case of refinancing the amount of commission depends on the number of days needed to return the new loan and its amount. Generally, the cost for granting this type of financing is a certain percentage of the loan value for a given time period.
Fees related to refinancing loans are not among the lowest. They are often close to the costs incurred due to the extension of the repayment deadline, which a few months ago were massively charged to the clients of loan companies. The amount of commission can reach up to 30-40 percent. amount borrowed.
A lot – it’s a fact. But let’s not forget that financial institutions are commercial entities. This means that every service and product they offer is supposed to bring profit.
In the case of an application for postponement of the loan repayment date or a request for a refinancing loan, these companies will be very satisfied. The more deferred the debt settlement day, the higher the interest and higher total costs.
Be aware of this. Although the legislator has strongly reduced non-interest costs (new anti-usury act), they are still not small. Lending money responsibly begins with a thorough reflection of your commitment.