Rus Articles Journal

Repay the loan and sleep peacefully

Most of Russians still did not get used to live very quietly on credit yet as it is done by the citizens of industrialized countries assured in tomorrow, and the similar mentality causes aspiration to pay off as soon as possible according to various loans including on mortgage loans. However aspiration - opportunities have to be aspiration, but for this purpose also. And they are: someone, for example, begins to understand after a while that its financial position was strengthened and allows to pay off on the credit of the assumed term much earlier; someone finds a possibility of loaning up, that is receiving the credit with lower interest rate for repayment of the credit with higher rate taken earlier. Naturally, at once there is a question as far as it is favorable and expedient?

If wants to save

Is interesting that the similar idea does not even come to residents of the western countries to mind. What for? Interest rates low and stable, at creditors and borrowers everything is planned for many years ahead. And here in Russia so far all not so: whether rates slightly the highest in the world, and nobody dreams of stability. All this leads to the fact that at the mortgage loan issued, for example, under 10% per annum approximately in 12 - 13 years of regular payments the borrower in the form of percent gives to bank the cost of one more same apartment. For this reason the thought of early repayment of part or all credit comes to mind. Actually, this the first that comes to mind when you want to save, but here only, making up the mind to such step, it is necessary to think over and weigh properly everything because in a question of early repayment of the credit there is a mass of so-called “reefs“.

the Dual relation to early repayment

First of all, it is necessary to deal with terminology. After receiving a mortgage loan and safe purchase on these means of housing, there comes time of calculations for the credit. To repay the loan - it means to credit on the account specified by the creditor all amount of the credit and the percent which are due on it. Early repayment of the credit is a voluntary payment by the borrower of the rest of credit debt ahead of schedule provided by the credit agreement.

On the one hand, early repayment of the credit is, seemingly, interesting to all. The borrower can save funds for purchase of housing, and to mortgage bank in conditions when everyone can happen, favourably somewhat quicker to receive back the lent sum. For this reason the majority of banks allows early repayment of mortgage loans especially as if the borrower wants (and, above all, has an opportunity) ahead of schedule to pay off, nobody to it in it has the right to prevent.

on the other hand, many banks do not welcome early repayment of mortgage loans. The matter is that they connect it with the financial losses defined for themselves. Logic of banks at the same time such is. Let`s say the bank placed means for ten years under rather high interest rate. Let`s assume, in five years of a rate decreased, and this money suddenly returns to bank.“ To attach“ them on former conditions where - or it is not possible any more. In language of bankers it is called problems of planning of a loan portfolio of bank.

Similar possible losses from early repayment of the credit banks refer

to the risks and if cannot forbid in general similar actions of borrowers, then many of them demand for it payment of a certain sum of money as compensation.

of the Condition of early repayment of mortgage loans at various banks significantly differ in

of Restriction on early repayment of a mortgage loan in p. These conditions are determined by a discretion of bank and, as a rule, register in the credit agreement. The borrower who decided to repay ahead of schedule the loan should get acquainted very attentively with conditions of this procedure and to count the concrete case.

Some banks practice certain cunnings: they enter into credit agreements points on impossibility of early repayment of the loan without the permission of bank. When signing such contract it is necessary “to fulfill“ a rate up to the end, and the credit cannot be refinanced. Sometimes banks provide early repayment of the loan with the permission of bank, but do not specify the term when it becomes possible in the contract.

the Majority of banks establish to

the moratorium (ban) on early repayment of the credit. On average under the contracts signed now there are moratoriums for a period of Z - 6 months (at a small number of banks - 12 months). It means that early payment becomes possible only after this term.

For example, at Uralsib bank early repayment of the credit is possible only after 6 months from date of issue of the credit. In DeltaCredit mortgage bank almost according to all programs early repayment of the credit is possible only in a year after its receiving.

At the same time almost all mortgage banks establish to

a certain minimum value of the sum of early repayment, and, having only saved up this minimum sum, the borrower can submit to the creditor the application for early repayment of the credit. For example, “Vneshtorgbank“ practices the following conditions: the first three months early repayment is not allowed then early repayment is possible without the commission, but a minimum of 15000 rubles, 500 US dollars or 500 euros.

early repayment of a mortgage loan is possible

U of “the Moscow Credit Bank“ without temporary restrictions, but the minimum sum of early repayment makes 15000 rubles (or an equivalent in US dollars and euro).

Should be understood also that for introduction of each of extraordinary repayments it is necessary to write the application which will be considered by credit committee of bank; at the same time it is necessary to realize that its decision not always happens positive. If the borrower did not submit such application, and just credited the superplanned amount into the credit account, then the sum, most likely, will be written off only at a rate of the put monthly payment.

with

Penalties for early repayment of the credit

At many banks the system of penalties for early repayment of the credit works (all this system of sanctions also has to be discussed in the relevant documents which are subject to attentive studying). The size of penalties averages about 2% of the sum of early repayment.

the Sberbank of Russia where early repayment of the credit perhaps at any time without any restrictions on the sum and penalties is Most liberal

in this regard.

At the majority of commercial banks penalties at early repayment of a mortgage loan take place. For example, at “Bank of Moscow“ at early repayment of the loan or its part within the first 6 months from the moment of granting the credit the penalty is provided of 2% of the sum of early repayment, and only after this term the borrower can return money ahead of schedule without any penalties. At the same time the minimum sum of early payment makes 2000 US dollars (an equivalent in currency of the credit).

At “Gazprombank“ the payment for early repayment of the credit at repayment in the first 6 months of crediting also makes 2% of the sum of early repayment (but not less than 1000 US dollars). After the expiration of 6 months of crediting early repayment of the credit is made free of charge.

penalties are even more rigid

At “Raiffeisenbank“: for early repayment of a mortgage loan within the first 5 years they make 4% of the sum of early payment (the minimum sum of early repayment of $2000 without the sum of monthly payment), and only on the expiration of 5 years the penalty for partial or full early repayment of the credit is not raised from date of issue of the credit.

the Money raised by banks for early repayment of a mortgage loan is called a penalty (prepayment penalty). In some banks, however, it is called not the frightening word “penalty“, but the commission or charge for early service. The essence from it does not change.

One more “reef“

Of course, for borrowers is present nothing pleasant in it.

But the following reef is even more unpleasant to

. Really, at early partial repayment of a so-called “body of the credit“ the borrower can, depending on policy of bank, or reduce the sum of monthly payments by the remained crediting period, or to leave the amount of payments former, but to reduce at the same time the period of crediting. That it is more favorable, to solve to the borrower, but at the same time it is necessary to understand that not always early repayment of a mortgage loan for bought the apartment means savings on interest. The matter is that if the credit is taken, say, for 10 years, then the main part of percent should be paid bank in the first half of this term. After it early repayment of the credit, as a rule, any more to the borrower saves nothing and gives only certain psychological comfort from thought of what needs to be paid, for example, not ten years, but only five or six.

For this reason, by the way, after a certain term penalties for early repayment of the credit also disappear (the bank already got the profit, and further early actions of the borrower to it only “on a hand“).

can save

On early repayment of the credit

Early repayment of a mortgage loan - very widespread phenomenon in modern Russia. Moreover, even if now the borrower of it does not plan, he can advise at the choice of the mortgage program all the same to pay special attention to this point. Who knows how everything will turn then, to overpay for and so madly expensive living space - occupation not palatable.

Early repayment of the credit allows not only to reduce the sum of monthly payments or to reduce the crediting period. It is possible to save on early repayment of the credit. It is possible to be refinanced, for example, in other bank on more favorable conditions. Besides, it is worth to remember that after early repayment it is necessary to notify insurance company on the termination of the credit, and then there will be an opportunity to return itself money for the paid, but not used insurance.

Anyway, everyone solves itself, but all conditions including early repayment of the credit, it is necessary to discuss at the time of the conclusion of the contract.