The main advantages of refinancing are:
Several small loans can be combined into one on more favorable terms. This makes it easier and more convenient for the borrower to control their financial expenses, and there is less chance of missing a monthly payment.
In case of deterioration of the financial situation, refinancing allows you to reduce expenses, avoid late payments and maintain a positive credit rating in the BKI (Credit History Bureau).
The procedure makes it possible to reduce overpayments of interest on a loan by refinancing at a lower rate.
If necessary, you can get additional funds for personal expenses without taking out another loan.
The refinancing mark is entered into the borrower's credit exit mobile number database history, but does not affect his rating: therefore, there will be no difficulties in obtaining new loans in the future.
However, this procedure also has a number of disadvantages that limit its use:
Typically, banks approve refinancing of loans taken out no earlier than 6 months before the application was submitted.
When combining several loans into one, the interest rate provided for it is not always more advantageous: in some cases, when repaying the loans separately, the overpayment will be less.
Many credit institutions put forward the condition that at least one of the refinanced loans must be issued in another bank.
Also, creditors usually refuse to refinance debt obligations with current or previously recorded late payments.