Banks are not easy nowadays because the interest rates are low and the maximum interest rate, in this case, can be 10%. As a result, the banks, seeing that they would not earn the same interest rate, decided to increase the so-called cross-sell or additional products.
Banking fees soared up insurance and amounts of 10-30% no longer surprise anyone. As for the commission, it is payable when the loan is disbursed and is not recoverable. It is different from insurance but below.
When can you withdraw from the insurance?
If we repay the loan or consolidate, in almost every case we can apply for a refund and the bank has 30 days to do so. In the event that we want to terminate the insurance ourselves, some banks do not cause problems and transfer funds. Banks often protect themselves against resignation from insurance and give various provisions in contracts.
One of these records is the option to collect a commission from the client or the bank will require an additional guarantor. If we do not have such a person we can get a termination of the loan agreement. The last entry is to raise the interest rate to the maximum value, i.e. 10% at the moment.
Payment of insurance funds.
Insurances that are terminated can be settled in two ways. The first is by giving up insurance, funds are transferred to early repayment of the loan, which reduces the repayment capital and thus shortens the loan period or reduction of the installment. The second option is to transfer to our private account. Then the loan parameters remain unchanged and we are only with additional funds.
How much will I get back from insurance?
If the premium was collected for the entire period in advance, the refund should be made linearly, i.e. in proportion to the remaining loan period. An example is when we have a loan period of 60 months and the premium was USD 10,000, if we have a loan of 30 months, the refund should be USD 5,000.
Sometimes banks use a different conversion rate and it may be that in the first months the premium will be higher the premium charged. All records should be in the contract. If the premium was collected monthly, we are not entitled to a refund.
Definitely yes, because even if the interest rate increases, the installment should decrease. We can always check the contract with an adviser who will help us calculate the possible return. If you have any questions, please contact me.