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Until recently, before the entry into force of the provisions on the change of supervision over the financial market, fees for extending the repayment period, as well as for reminders sent to people who did not pay their liabilities on time were the main earnings of loan companies . The introduction of non-interest cost limits meant that lending companies changed their current policy.

In a situation where we realize that we will not be able to return the borrowed cash on time, we can choose one of two solutions: extend the loan or use the refinancing option . At the moment, the extension is only available from selected lenders. The loan refinancing service has become much more popular. Below we will briefly explain what it is and how it can be carried out.

What is a refinancing loan?

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Refinancing a loan is nothing more than making a new financial commitment to pay back the debt to the previous lender. In other words, if we are unable to pay back the loan on time, we contract another one in another company, and the funds obtained in this way are allocated to pay the debts to the first institution that helped us.


To make life easier for borrowers, many companies help in the search for a refinancing loan and help in completing all necessary formalities. The only thing a borrower with a problem with debt repayment must do is report it to the loan company. This can usually be done through your account on the company’s website.

The amount of commission – what does it depend on and how much can it be?

The amount of commission - what does it depend on and how much can it be?

As in the case of extension of repayment, also in the case of refinancing, the amount of the commission depends on the number of days needed to return the new loan and its amount. It is usually a certain percentage of the loan value for a given time period.

You should be aware that the fees associated with a refinancing loan are not among the lowest. They are often similar to the fees incurred for the extension of the repayment date, which just a few months ago were massively charged to customers of loans extending outside the banking sector. The commission can be up to 30-40% of the amount borrowed.

Is refinancing legal?

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It would seem that by granting refinancing loans, companies are breaking the law. However, this is not the case at all, because the law does not prohibit refinancing. In this way, lenders, under the terms of an appropriate agreement, can gain more than the statutory limits stipulate. In practice, this means that refinancing loans replaced the possibility of earning additional fees for late repayment of debts.


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Each of us may fall into a momentary financial trouble, but it is important to know how to get out of them reasonably. Choosing a refinancing option seems much better than spreading your hands and waiting for the situation to develop, which can only bring high interest. A refinancing loan can be the proverbial last resort for indebted borrowers. Especially since the refinancing procedure is not currently regulated by any legal provisions.