Refinancing helps to save money on Personal Loan

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Refinancing helps to save money on Personal Loan
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Refinance of a loan is a process of transferring
the outstanding principal amount to another bank.
In this way, the rest of the repayment will go
towards the new bank and the previous loan
account will be closed forever.
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Here are some benefits of loan refinance. Lowers
the Interest Rate Personal loans come with a
fixed interest rate. But after one or two years
of servicing the loan one may find that the
interest rate has come down. In such scenario,
one can go for a refinancing which will bring the
interest down to the present rate.
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Assembles Multiple Loans A refinance helps to
bring multiple loans under a single umbrella.
He/She can go for a refinance by taking a new
loan with a cheaper interest rate and repay all
other outstanding amounts. So, here on he has to
pay only one EMI.
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Better Services Maintaining a good relationship
with the customer is a prime duty of the lender.
But in the cases of not providing satisfactory
services by the lender, a borrower has the option
of changing the lender by a balance transfer.
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Credit Score Jumps Skywards A refinancing is
very beneficial if you want to boost your credit
score. The act of balance transfer makes a person
proves the consciousness regarding his finance.
Moreover, a refinance means prepayment of the
existing loan. So, it both the ways the credit
score is certain to improve.
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Options to Choose between Longer or Shorter
Tenure One may increase the income with the
passed time while others may be burdened with
more responsibilities. In such cases, one may
want to increase the EMI to become burden free
soon whereas other may want a smaller EMI which
will be easy to his pocket. With a refinance one
has the option once again to determine his EMI
and tenure.
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The Convenience of A Top-Up Loan A refinance
gives an option to take a top-up loan over the
personal loan which is higher than how much one
can get with the existing lender. However, both
the lender's will check FOIR while sanctioning a
top-up loan. A new lender will always try their
best to provide the best services to the new
customers. So there are chances of getting a
top-up loan of a bigger amount.
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How much benefit can be earned by the refinancing
depends on these four factors. Total Cost
Remaining Loan Tenure Outstanding Principal
Time and Effort
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So, before a refinance it is highly advised to
check these points to calculate the total
benefit. If the benefit is not very big then it
is better to be with the same lender. Spending
much time and effort for a limited profit is
never worth.