After the Central Bank raised the key rate, interest rates on loans will also increase Source: Artem Ustyuzhanin / E1.RU On September 13, the Central Bank raised the key rate again. This is the fifth increase in a year, and now it is 19%. This means that after it, bank rates will creep up – both on loans and deposits. Experts say that now is the time to save money, and not borrow it, that is, it is definitely worth refusing new loans for now. What about refinancing? Should I apply now or is it better to wait? Let’s figure it out Refinancing – what is it Refinancing is also called refinancing – in fact, it is a loan that can be used to cover the previous debt. It is often used to combine several loans into one, reduce premiums or reduce the monthly payment. At the same time, banks often offer to increase the loan amount – The point of refinancing a loan is that a client of one bank takes out a new loan in the same or another bank, covering the existing debt at the expense of loan income, hence the question. “Do consumer loan and refinancing rates differ? It is not entirely correct,” says financial expert Vladimir Kuznetsov. “The benefit of refinancing for a client is either a lower rate on a new loan offer or a longer repayment period for a new loan. Vladimir Kuznetsov is Vice President of the Association of Lawyers for Registration, Liquidation, Bankruptcy and Legal Representation. , Deputy Head of the Federal Mediation Center, President of the All-Russian Union of Mediators. The requirements for an applicant for refinancing will be the same as when applying for a regular loan – the likelihood that the borrower will have delays, penalties and . bad credit history will be provided a new loan is small. So, if we are talking about reducing your monthly payment due to the fact that you cannot pay the required amount, then you should apply for refinancing before the delay begins. It is better to first try to agree on a restructuring – a change in the terms of the current loan agreement. For example, this can reduce the amount of payments by increasing the repayment period. Credit institutions often meet clients halfway on this issue, since they are interested in the borrower repaying the debt. According to the Central Bank, in the first half of 2024, banks restructured 497 thousand loan agreements. When refinancing is beneficial If we are not talking about reducing the monthly payment, but about the long-term perspective, then refinancing can be beneficial for the client. if the rate on the new loan is lower than on the existing debt “Refinancing is useful only when the rate falls,” says economist Georgy Ostapkovich. – At the same time, it is important to carefully read the agreement – it may contain some conditions that, despite the nominal rate, actually make the loan more expensive Georgy Ostapkovich – Director of the Center for Market Research, Institute of Statistical Studies and Economics of Knowledge, National Research University Higher School of Economics Pay attention to at least the first page of the agreement. By law, banks must indicate the full cost of the loan on it – that is, the amount you will ultimately pay if you repay the debt on time and without violating the terms. Is it profitable to refinance now? about when you took out the loan you want to refinance. When the Central Bank rate changes, banks always adjust their offers: the higher the Central Bank’s key rate, the higher the interest credit institutions will demand for using their money. The key rate has been growing for a year now, and as a result, loans are only getting more expensive. And they will continue to get more expensive until they decrease – The current loan rate is higher than the previous one, at which you could take out a loan six months or a year ago. Therefore, refinancing them now will not be profitable, says Ostapkovich. The key rate was higher in recent years only in March-April 2022, so refinancing now will not be profitable for most borrowers, when refinancing will have to be done anyway – for example, if the bank refuses to restructure, and you have to reduce the monthly payment. In order to refinance correctly, when applying for a new loan, it is important to consider many factors – the term, the possibility of changing the rate in the event of an increase in the key rate in the future, the amount of the monthly payment, the terms of early repayment. loan and much more – all this must be calculated, for this you need to have a certain level of knowledge. If you are not sure that you can do it yourself, contact a specialist or take a friend who knows how to do it, – advises Ostapkovich. – The conditions may be different, you need to pay attention to everything, look at the terms of the agreement and consult with competent people. Sometimes you can do without refinancing, even if the bank is not ready to restructure the debt. For example, you can take advantage of credit holidays – in some cases, the bank cannot refuse them by law.
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