Freedom from debt: how ahead of schedule to extinguish the credit

According to the NBCH, the early repayment of retail loans for the first 3 months of 2016 increased by 67% compared to the first quarter of 2015. Three months of this year the Russians paid until the expiration of more than 950 thousand credits. Data for the study was provided to NCB more than 3,700 financial institutions. The calculation took into account the number of fully pre-paid the mortgage, consumer, auto loans, credit cards and loans in MFIs.

The trend for early release from debt, NCB recorded in the fourth quarter of 2015 — then the citizens repaid ahead of schedule 720 thousand loans. First borrowers are paying on consumer loans in the first quarter of this year were settled 640 thousand of such loans. On the second place — credit cards and microloans.

The main reason for the growth of early release from debt, the NCB calls the end of the outperformance of deposits that banks open in late 2014 and early 2015 after raising the key rate of the Central Bank to 17%. “The funds from these deposits and sent on early repayment of loans”, — says marketing Director of NCB Alexey Volkov. Wolf says that consumer credit people are often quenched due to the fact that they are more. According to him, the share of loans for purchase of consumer goods exceeds 2/3 of all retail loans.

The correct behavior

In case of early repayment of loans should pay attention to several parameters — amount, term, rate on the loan and the remaining time on the payout. Independent financial adviser, associate Professor of Finance University of Saida Suleymanova believes that it is important to start with the most expensive loan. “If the borrower simultaneously open several different loans, such as consumer and card, first to repay the loan with the highest rate,” she says.

You need to pay attention not only to bet, I’m sure the CEO of the company “Personal Advisor” Natalia Smirnova. “The importance is the effect that will have a partial repayment on the monthly payment. If early to pay the mortgage, the monthly payment is not much affected. According to this criterion the best is still the relatively short maturity of consumer loans,” — said Smirnov.

The period for which the loan is issued is taken into account in the third turn. Since a large portion of the payment at the beginning of the term of the loan is to pay interest, the consultants suggest quenching in the beginning credits until the end which left more time to save money. “Long-term loans more profitable ahead of schedule to extinguish the first half of their actions. This is a General recommendation for all loans with annuity payments”, — said Smirnov.

Financial opportunities

Payment of the loan before the deadline does not always have an economic sense — for example, if the amount allocated for this purpose are small. Suleymanov does not recommend to go for it, if it is not possible to pay at least twice the size of the monthly payment.

Often limit the minimum amount of additional loan payments and banks. Deputy Director of Department of retail business development Svyaz-Bank Andrey Chiseled says that usually the borrower will have to Deposit an amount not less than the amount of the monthly payment or the Bank amounts. So the bankers are struggling with the costs. While officially, the Bank may not establish a fee for early repayment is prohibited by the law on consumer credit, says the managing partner of the National Agency for financial studies (NAFI) Paul Samiev.

Smirnov believes that in case of early repayment must weigh their financial ability and not to deprive themselves in order to repay the loan. “After that, if a person does not have funds, it makes sense to pay not in advance, and in a usual mode”, — the expert believes.

Suleymanova drew attention to the fact that banks early repayment is not profitable. “Officially, no Bank did not confirm, but many times I have faced the fact that in the new appeal for a loan banks otherwise interfere with the borrower. Can even refuse,” she says. For banks, the most preferred option will repay the loan on time, no late payments and no early payoffs, says Samiev.

Smirnov, however, certain that early repayment does not affect the decision of banks when granting the next loan. “An exception may be only the situation when the client takes a large amount for a long period of time and pay it completely in a year or two. For such borrowers, the banks really do not earn and they can then refuse”, — the expert believes.

Everything is under control

According to the head of Department of retail crediting of Bank of Moscow Sergey Cetina, on the date of debiting the amount of the early payment, the borrower shall control the sufficiency of funds for early payment. “Sometimes there are situations when your account has less money than you need, but the Bank can deduct only the amount that is specified in the statement for early repayment, so the payment doesn’t even happen — we have no right to write off a smaller amount,” he says.

Experts also urge not to forget about the documents. “After a partial or full early repayment, the client should request from the Bank a document in which is confirmed the fact of receipt of payment and stated the changed conditions on the loan — change or term, or monthly payment,” — says Natalia Smirnova of “Personal adviser”.

Suleymanov warned that sometimes the client pay on the loan can still be considered a debtor because of errors employees of the Bank. “I had a case where I paid part of the loan early, but Bank left the old chart and accrued payments on it,” she says. In her opinion, these points should also control yourself.