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Refinanced loan – basic information

Let’s assume you have a cash loan, but you are not happy with your current installments and you realize that you could pay less with your competitors. Until the end of the loan period, you still have ten years and you think you are stuck with an unfavorable offer. Nothing could be more wrong! Another bank may repay your debt and offer you the same financing on more favorable terms. This is how refinanced loans work in a nutshell. has more information

What does the economic encyclopedia say about refinanced loans?

What does the economic encyclopedia say about refinanced loans?

A refinanced loan is granted for the repayment of a single liability, e.g. a cash loan (as opposed to a consolidation loan that can cover many different types) by a banking entity which on behalf of the borrower regulates the arrears in the current financial institution, then offering other – usually more favorable – conditions for further repayment.

The essence of the loan for the indebted , i.e. refinanced loan, as already mentioned in the introduction, is to change the bank , which is to bring you cost reduction, mainly by cutting the amount of the monthly installment . For example, when taking out a loan ten years ago, interest rates in Poland were definitely higher than at present – so by changing the terms of the loan you can save a lot.

How to apply for a refinanced loan and what to look for

How to apply for a refinanced loan and what to look for

The majority of large banks operating in Poland have refinancing loans in their offer, allowing them to change lenders in the case of both mortgage liabilities and cash loans . A refinancing bank will place a number of requirements before the potential borrower, however , which should be kept in mind.

First of all – in addition to the standard procedure for assessing credit rating and solvency – the bank will check the history of repayment of existing installments in the financial institution where the cash or other loan was taken initially.

If there were any delays there, then you may not issue a positive refinancing decision.

What’s more, the bank taking over the loan must earn on it – if it turns out that the calculations show that refinancing on more favorable terms is unprofitable for the bank, then it will not decide to take over the obligation and repay it on behalf of the client.

The currency spread should also be taken into account , i.e. the difference between exchange rates – this is particularly important if we want to change the zloty loan to foreign currency (or vice versa). We may expose ourselves to additional costs.

If you are interested in a loan for those in debt or offer other financial support in making a choice, you can use our financial comparison engine, which will allow you to choose the best option in a few minutes.