Re-crediting allows decreasing interest payments

Re-crediting allows decreasing interest payments
Re-crediting is a possibility to re-finance your existing credit with another creditor on new and better provisions, e. g., lower interest rate or possibility to receive additional loan that existing creditor does not issue. Re-crediting results in repayment of existing credit and conclusion of a new credit contract with another credit institution. One of the main reasons, why customers choose re-crediting with another creditor, is decrease of interest payments.

As West Kredit expert Peteris Grudulis acknowledges, people are often lazy and do not compare various offers, as a result, unfavourable credits are taken. “Gathering information about potential lenders, you should not confine yourself to a phone call to the company – you should meet, receive calculations, schedules and contracts. If any lender says that you will receive the contract later, you should start to be cautious of any hidden provisions.” Interest rate, contractual provisions and possible future early repayment provisions should be paid the greatest attention.
Although most often customers re-credit in non-banking crediting sector, bank customers often also re-credit to non-banking sector.
“There are different stories. For instance, customer has had a problem, therefore no credit payments were made for several months. Despite the fact that the person has solved their problems, bank is not meeting his wishes anymore, terminates the contract, and customer must repay the whole remaining amount of the credit within one month. Other banks don’t work with such customer, too, since they are entered in registers of defaulters.
For West Kredit more important is that customer proves their solvency,” tells P. Grudulis.
“Another example is credit payers to banks, who fail to fulfil their obligations for small credits. Small credit issuers submit the case to the court, further to bailiffs, and they make a levy record to the property. This record is a reason for the bank to terminate the contract, since it provides that no levies on the part of third parties may be directed to the property. In this case, a person also has just two choices – to hide in a cave and wait until their property is sold at the auction, or to solve the situation by re-crediting."

Peteris Grudulis acknowledges that people often have not even showed interest in possibilities to use offers of competing lenders that would allow solving the painful situation. “Although information is widely available, most often people come to us with summary of situation, and we offer possible solutions, for example, re-crediting. People also have a false idea that they cannot freely dispose of the pledged property. With the lender’s accept, property may be both sold and re-credited. Lender may not deny such possibility, it is strictly regulated by the CRPC.”
Remember however – re-crediting will not be a cure in every situation. “Re-crediting does not mean that person with problems in one institution can freely go to the next one. Before granting the credit, we carefully evaluate person’s financial situation and possibilities to repay the loan," stresses P. Grudulis. “However, lately people have started to solve their problems timely, without waiting to the last.” Re-crediting is a possibility to find more favourable credit provisions not only for consumers, but also for performers of economic activities – companies and self-employed persons. “People are very active – they look for possibilities to implement their business intents and projects.

Approximately 40% of our borrowers are entrepreneurs starting the business, changing field of activities or looking for a take-off point for a bigger breakthrough.
Our customers also include farmers and small farms, which need assets immediately, for example, for sowing,” tells Peteris Grudulis. “Banks do not meet requests of small entrepreneurs very often, besides, they often deny further support for companies, whose first business plan has failed, but who have other great ideas that they would like to implement. If customer’s immovable property allows it, West Kredit also offers to help solve business development issues. We look at the company’s business plan.”