Customers who register for a bank loan are no stranger to the phrase “maturity of the bank”. However, “What is maturity?” You know exactly? In this article, Fastloans.PH will provide you with accurate information and bank maturity notes.
Table of Contents
- 1 What is maturity?
- 2 What is Bank Maturity?
- 3 What is the maturity date?
- 4 Detailed information about bank maturity
- 4.1 Advantages when a bank loan maturity
- 4.2 Type of bank maturity
- 4.3 Maturity method
- 4.4 Loan maturity term
- 4.5 Procedures for bank loans maturity
- 4.6 Bank maturity fee
- 5 Some notes on maturity
- 6 Summary
What is maturity?
According to the most general definition, we can answer what is maturity question as follows:
Maturity is a term indicating the time when a contract is due, terminated or re-signed a new contract. In some cases, maturity can also be understood as an extension of the contract period.
What is Bank Maturity?
Although the definition of “maturity” exists in many different fields and industries such as credit cards, savings books, installment loans … however, maturity of bank loans is still the most popular.
Bank maturity is a form of extending a customer’s loan to a bank or credit institution when it is time to complete the contract.
In other words, bank maturity is a form of refinancing to extend the loan period when unable to complete the contract on time. Avoid bad debt situations that affect credit history.
What is the maturity date?
This is a fairly easy to understand definition, the maturity date is the date when the contract is due to be completed or the new contract refinancing as specified in the loan agreement.
Read more: What is grace period?
Detailed information about bank maturity
As mentioned above, a bank maturity loan is essentially a form of refinancing to extend a loan when it is not possible to complete the contract when the debt is due.
Advantages when a bank loan maturity
Maturity loan is a form of bank loan that has many advantages for customers who cannot pay off loan applications on time.
- Banks operate under the management of the state bank, so customers do not need to worry about the interest rates too high as external loan services.
- The loan will be due on time according to the previous loan contract, avoiding bad debt due to late payment or late payment.
- In the form of refinancing, customers will not be charged a penalty for late payment.
Type of bank maturity
It can be seen that among all maturing, bank maturity activities is a popular activity known and interested by many people. There are two common forms of bank maturity.
This method is simply understood as continuing to borrow a new loan after the old loan term has expired but the customer has not yet paid off all debt of this loan.
With this method, customers have a new loan to pay off the old loan. Some people or some banks call this method by the name: debt repayment.
This is a form of commitment and agreement between a bank and a savings customer that when the maturity date of the savings book comes to an agreement, the bank must pay both principal and interest to the owner, whose name is on the savings book. save. At this time, the maturity date is the last day of the savings book deposited at the bank.
If at the maturity date, the customer has not come to receive money, the bank will automatically renew this savings book with the old term and the interest rate is calculated based on the interest rate at the time of renewal.
In addition to the above two forms, there is now a blooming service, heavily advertised, that is credit card maturity. In fact, credit card maturity will be in the group of loan maturity form, because credit card is a card with “spend first, pay later” feature.
When opening a card, you are borrowing from the bank an amount of money to use for payment when shopping. That is, you are spending the money loaned by the bank under a certain limit. After 45 days of interest free, you have to pay it back to the bank or you will be charged with a high interest rate.
However, maturity of credit card is currently a “underground” activity not applied by banks. It is like a “double-edged sword” that can cause the cardholder to encounter dangerous situations, so everyone needs to consider carefully when participating.
Currently there are maturity methods that you can choose from including:
Maturity in place
On-site maturity is simply understood as you perform the maturity process at the same bank you are borrowing from. Usually this is most used during the maturity of loans, particularly mortgage loans. At this point, the bank will require customers to add additional collateral for the new loan.
In addition, before accepting the maturity of a new loan, the bank will review and evaluate your business performance and ability to repay debts. If the customer’s difficulties are temporary and still meet the bank’s requirements, the bank will agree to let the customer continue to extend the loan.
Roaming maturity is a form in which you mature through another bank, not the one you are borrowing from. Accordingly, when the old loan is about to expire, you perform the maturity and convert to another bank loan. Roaming maturities usually happen when the bank you want to transfer has more attractive loan terms and interest rates.
Example: You borrow 1 million PHP from bank A, with an interest rate of 7% / year for 3 years. Coming to the expiration date, you implement the roaming maturity, convert this old loan to a new loan at bank B with an interest rate of 6% / year and a term of 4 years.
Borrowing outside maturity to repay bank debts
It can be said that this method is currently blooming, spontaneous in some companies or individuals.
Accordingly, when customers have a loan coming due, individuals and organizations will lend you a loan to repay the bank. Of course, you’ll have to borrow at a much higher rate than the bank’s rate.
After you pay off your debt to the bank, you will proceed to borrow a new loan, pay that amount to the outside lender.
Loan maturity term
To be able to complete the loan maturity procedures, customers need to meet the following conditions:
- Being in the age group to be supported with bank loans from 20–60
- Having a stable income ensures the loan contract payment
- There is no bad debt or attention debt at any bank
- Have ID card, Family record book in the province where the loan is registered
- Have collateral to secure the loan
Procedures for bank loans maturity
If a customer meets all the above conditions, how to apply for a matured loan? Very simply, a loan application package includes the following documents:
- ID card or citizenship identification, household registration, marriage registration (if any)
- Application file, request for bank loan
- Documents proving the ownership of collateral. For example, red book, car registration …
- Property mortgage contract
- And some other papers as required
- Bank maturity loan procedures
- Easy loan maturity, simple application
Bank maturity fee
When performing a maturity loan contract, the customer will be charged a fee called the bank maturity fee. Depending on the bank, the type of loan contract that has different levels of maturity fees.
Specifically, for mortgage loans, the maturity fee ranges from 0.3–0.5% / day and 0.5–0.7% / day for unsecured consumer loans.
Some notes on maturity
To avoid mistakes when it comes to maturity, you should also consult and note the following issues:
- Choose a maturity form that suits your conditions and financial ability for a matured loan.
- Understand carefully the paperwork, application process and the due process.
- Learn carefully maturity interest rates at banks.
- Pay attention to the contract expiration time to expire in time and not fall into bad debt.
Above is the information about the due service that readers can refer to, hopefully the article will bring useful information for readers. To answer questions and get a Free consultation you can leave your information now.
See also: Maturity from Wikipedia