Changing Banks When You Have a Loan
Thinking of changing banks but still have a loan to pay off? You can still switch banks even if you have a loan, but there are important considerations to keep in mind. Here’s what you need to know about changing banks when you have a loan.
How Hard Is It to Switch Banks if I Have a Loan?How hard is it to switch banks while buying a house or car with a loan? It will depend on the bank you currently have a loan with. Although most banks will let you easily switch banks when you have a loan payment, you’ll have to review the loan terms. A loan term is an agreement that you signed when you took out a loan. It states all your loan requirements, including the terms and conditions of switching over to a new bank. With some banks, you may lose the benefit of a lower rate or fees that were waived when you took out the loan. The loan terms will specify whether or not you will be penalized and how much you need to pay if you are. You may be able to get similar benefits at your new bank by refinancing your loans as well.
Things to Consider:Consider these important factors before you switch over to a new bank:
Loan TermsAs mentioned above, loans come with strict loan terms. You need to read the loan terms carefully. Sometimes, you may need to give your bank early notice when changing your banks. In other cases, you may have a penalty fee. Consult your old bank to ensure you comply with the loan terms. If you don’t follow the loan terms, you can pay more fees and penalties down the line.
Loan Payment RequirementsAre you switching bank accounts before your monthly loan payment date? You need to switch your funds over to your new bank accounts as soon as possible to avoid late loan payments. Consider keeping a small amount in your old account just in case your automatic payments don't go as smoothly as planned. You can have this money transferred into your new bank account after your successful monthly payment. Don’t forget to ensure all your old automatic payments are being transferred to the right account. After you switch over to your new bank, all of your details should be updated on their system, but you can log into your banking app or account and double-check the info. If you need to update any info or adjust your loan payment schedule immediately. Even after you switch banks, it’s important to pay your loans on time. Late payments can lead to a bad credit score over time. Even though you already have a loan, life can be unpredictable, and you may need to borrow money from your new bank at some point. Keeping a good credit score can help you get a loan during these unpredictable periods.
Let FNCB Bank Help You Switch
Switching banks to FNCB Bank is easy. We provide a convenient switch kit for all clients looking to switch banks. Our switch kit guides you on following steps when switching over to FNCB Bank. Simply fill out our application form and with your authorization, we will help you switch your automatic payments. You can download our switch kit and bring it to any FNCB Bank Community Office, and we’ll help you change banks quickly and easily. Once you switch banks, you’ll also have access to a range of loans that you can use in the future should you require funding for a business, vehicle, home or a student loan.
Contact our customer service team to find out more about changing banks today!