What Are the New Rules to Credit Repair?
How does the credit repair process work? In September 2016, the most important changes were made to the terms and conditions of consumer credit and credit card repair. Changes in loan repairment transactions are made only on the terms of the use of credit cards and consumer loans without mortgage and car loans. The maturity of loans after repair was limited to 48 months. For individuals who have difficulty paying off consumer credit or credit card debt, the opportunity to pay off their debts within 72 months has been provided. In such new rules, the right to determine interest rates is granted to banks. Typically, in the 72 – month refinancing option, interest rates are higher.
Who Can Get Approval for a 72-month Refinancing Plan?
To take advantage of the 72-month refinancing plan applied to consumer loans and credit cards, the borrower requesting a refinancing loan must have a credit profile that will be approved by the banks. In addition, it is taken into account how timely monthly payments were made on the current loan. Those who do not make payments on housing and car loans cannot use the 72-month loan refinancing plan. While applications from borrowers with similar terms and multiple credit card debts, but without a mortgage or car loan, are likely to get approval for a repair loan application. Especially a great chance for approval from those borrowers who make payments on the loan on time and in the amount established by the loan agreement.
It is important to note that the last decision-making body in approving the loan is the Bank, although the refinancing of the loan is carried out in the context of the person’s ability to pay.
How is the Credit Repair Process Going?
The first thing to do to start the repair credit process is to apply to the Bank. The refinancing process begins with the Bank requesting the applicant’s credit report and determining the repairer’s future terms and conditions. Thus, a new loan plan is created by determining a more appropriate loan amount, payment schedule and their amounts. During the refinancing process, it is important to determine the payments according to the budgets that borrowers have. It should be noted that payments according to the schedule established by the Bank are important to maintain a positive credit rating.
What Happens After the Credit is Refinanced?
The most important issue is the timely payment of monthly payments after the loan refinancing process is completed. The new loan plan provides for a simplified version of the payment schedule for the borrower. Timely payment of payments after the loan repairment process will prevent the credit rating from decreasing, which will increase the probability of obtaining positive results in credit relations with banks in subsequent periods.
If you want to get rid of part of the financial burden in the form of separate monthly payments on loans, use the method of refinancing the loan, combining loans into one Bank. You can find more information on our website.