The best way for those who need a lot of money but who have a low salary is Co-borrowing , to find others willing to take on the responsibility to repay loans together with you. Financial institutions require that a co-borrower have a relationship to the borrower. See more in Co-borrowing In the case that parents become a co-borrower with their child, this in itself is not a problem, but many problems can occur with taking on relatives as co-borrowers, such as complications that arise from divorce.

Trying to remove the status of your co-borrower is something that many people will attempt for one reason or another, but in most cases this action will be rejected by the bank, which had specifically based the loan on the combined ability of you and your partner to make payments. Removing a co-borrower from a contract will be considered contrary to the original terms and conditions.

Although directly removing a co-borrower from a loan isn’t possible, not all hope is lost. The way to solve this problem is by refinancing to other banks. To learn more about the method of refinancing, which can also be used to change creditors in the event of a better offer, with the advice of TerraBKK, go to Reduce Your Debt by Refinancing.

The procedure of refinancing to change your co-borrower is the same as normal refinancing. The new bank will consider the borrower’s have the ability to repay. If the borrower has the ability to pay installments on the loan, the new bank will approve the loan. On the other hand, the bank will tell you to find a new co-borrower and proceed with the refinancing afterward.

At this point, you must take your co-borrower to the Department of Lands to proceed with 3 things as follows.

  1. Redeem the mortgage from the earlier bank
  2. Make an agreement to buy and sell (this entails a fee of about 5% of the appraised price of lands and buildings)
  3. Mortgage to a new bank (which entails a fee of about 1% of the loan from the bank)

These 3 things must be processed to finished at once.

After that, the borrower will repay the debt alone or with another co-borrower who replaces the earlier partner. In the case of refinancing to be the sole borrower, the most important thing is to have the ability to pay the installments of the loan as requested by the new bank.

Co-borrowing helps to enhance credit and reliability. If upon self-evaluation you find yourself unable to manage the remaining debt, you should not proceed with the refinancing as you will merely waste your time trying to get an un-obtainable loan.