Useful advise in case you want to proceed with a renewal assignment of the fifth.
The transfer of the fifth can be renewed only after having paid 40% of the loan. So if you have funded in 120 months you can renegotiate it only after paying 48 installments.
The only exception can occur if the loan has a duration of 60 months and in that case you can renegotiate it even before the expiry of the two fifths (24 months) only with a new assignment with a duration of 120 months.
Example of renewal times
- 36 months after 15 paid installments
- one 48 months after 19
- a 60 months later 24
- a 72 month after 29
- a 84 months later 34
- a 96 months later 39
- a 108 month later 44
- a 120 month later 48
The renewal of the sale of the fifth is carried out for liquidity needs as with the new loan the financial company must necessarily pay the previously subscribed one and the difference between the new loan and the extinction of the old loan will be disbursed as new liquidity.
A further advantage can be a reduction in interest by signing a contract for the sale of the fifth with minor interests compared to the old operation.
So it will be good to carefully check the difference in costs ( refer to the APR ) between the two loans to see if you are doing a good operation. Because often the new contract provides for an extension of the duration of the amortization plan. It is therefore good to compensate at least partially with lower overall costs. For example if you are paying a fifth sale with a 12% APR and a residual of 72 installments if you make a renewal by extending the loan by another 48 months but with an APR of 8% you will have a 4 year increase in duration but contextually you will save on the remaining 6 years of the previous loan.
Reimbursement of costs
The early termination of the previous transfer of the fifth entitles you to the reimbursement of some costs incurred in advance in the contract that were related to the initial duration of the contract. Going to close this contract early, the costs related to the residual duration must be repaid.
In fact, in the extinctive count you will surely find the reversal of the interest not accrued but it is not said that there are the counts relating to the reimbursement of other costs such as insurance policy (attention that the employees are two separate Life and Employment policies) or commission costs.
In this case it is advisable to contact the financial institution to inquire about the procedures for requesting reimbursement for the insurance premium not taken and the costs of the bank / financial commission.
On the other hand, the so-called “Up front” costs will not be reimbursed, such as for example the costs of preliminary investigation or the cost of managing the case since they are independent from the duration of the loan.
We advise you in case you want to proceed with a renewal assignment of the fifth to ask in advance for the extinction count. This way you can calculate exactly what you could do by subtracting the new quote and the amount indicated in the calculation. This is because the amount of the balance is not indicated on the new contract and you will probably have to trust the agent or bank operator who is instructing the operation.