Loan transfer? Start here with the Skip
Those who have taken out a loan naturally want to be confronted with favorable conditions. Now it is true that at the time of taking out a loan also offers those favorable conditions, but that after a while another loan provider comes into the picture who can offer you conditions that are even more favorable. At such a moment, transferring a loan is suddenly very interesting. See yesicansucceed.com
However, before you actually proceed to loan refinancing, you must carefully consider what the consequences may be; for example, it is quite common for you to be confronted with additional costs (the so-called refinancing fine). How do you approach this as smartly as possible? After all, after you have taken out your loan, you are in a better financial position. Snakes under the grass must therefore be detected in time to make the right choice.
Refinance fine on Loan
In some cases (in particular when you transfer a mortgage or revolving credit) you may have to pay a transfer penalty. The fact that such a refinancing fine was one of the possibilities of the loan in question must be communicated immediately by the lender at the time of taking out. If you have paid attention (and have read the fine print), you will know whether a rescheduling fine applies or can apply in your case.
Mortgage loan transfer
The loan form that is often taken over in the mortgage loan. In the vast majority of cases, there is a rescheduling penalty when borrowing this type of loan. That in itself can be explained very well, especially when the mortgage was initially taken out on the basis of an interest rate that has been fixed for a number of years.
The mortgage lender (such as a bank) assumes at such a moment that during the agreed period a certain amount of interest can be expected from the person who applied for the mortgage. That amount will of course be lost with a transfer, and the provider wants to be compensated for this. Most mortgage lenders refer to the refinancing fine with the term “penalty interest”.
There are mortgage lenders that use favorable schemes for switching companies, but those schemes are not standard. So if you want to switch without having to worry about the penalty interest, you must be well informed in advance. In addition to any penalty interest (or the refinancing penalty), there are often a number of other costs that you will incur when borrowing a mortgage. This includes the costs associated with setting up the new mortgage. Well-known examples of this are mortgage deed costs and consultancy and brokerage costs. In most cases, your new mortgage lender will help you to complete the financial settlement of the mortgage transfer in a simple and effective way.
Transfer current credit
Relocating a revolving credit is quite simple compared to relocating a mortgage or a personal loan and it costs you a lot less money. The refinancing fine, or penalty interest, does not apply to a revolving credit. That has everything to do with the specific characteristics of a revolving credit. This type of loan does not have a fixed term (only a theoretical term) and therefore the revolving credit provider cannot count on a predetermined amount of interest. You only pay interest on the amount that you have actually withdrawn.
So if you want to refinance a revolving credit loan, or rather: do you want to switch to another revolving credit provider then it is a matter of repaying what is still outstanding. Then you are free to go. Various providers of revolving loans have a so-called ‘transfer service’. If that is the case with your new provider, you do not have to take any special actions yourself. If there is no question of a rescheduling service, then you must handle the situation with your current loan provider yourself. Make an official request (after you have repaid the outstanding loan amount including the interest) to that provider. This prevents you (BKR) from remaining registered as a borrower.
Transfer personal loan
In fact, reselling a personal loan is a bit like resending a mortgage. With a personal loan, a fixed amount is borrowed (just like with a mortgage) that must be repaid in a pre-agreed period at a fixed interest rate. This is important to realize as the lender may therefore assume a certain amount of interest. If you transfer the personal loan to another lender, the bank where you were initially a customer will miss out on money. Logically, that bank (or another financial service provider) wants to be compensated for this.
Legally, rules have been agreed for the amount of the penalty interest (retraction fine). You repay the loan with a legally determined maximum interest fine of 1 percent of the amount to be repaid. In many cases, the bank or financial institution helps you to properly complete the transfer of the personal loan.