A consolidation loan can help recover earlier financial stability. It can also improve the liquidity and transparency of home finances, as well as facilitate their control. Its favorable conditions can make it less expensive to service your existing debt. And in addition, we will not have to remember about the timely repayment of installments of several loans, which will be replaced with one installment. It is a loan granted for the repayment of our previous obligations. It can be used to pay off traditional cash loans, car loans and even credit card debt.
Generally, there are two types of consolidation loans on the market:
1. Cash – the interest rate is similar to other cash loans. The loan is granted for longer periods – for example 5, 7 and even 10 years.
2. Mortgage – the interest rate is lower than cash loans. However, the actual price is very high: in exchange for lower installments.
In the case of a consolidation loan, the repayment date can be up to 40 years. Thanks to this, the monthly installment is lower than the sum of all our existing liabilities. The big advantage is that the consolidation loan has a much better interest rate. This provides additional savings. A consolidation loan can be drawn in any currency of your choice. Which you can change without paying any additional fees.
Consolidation decisions should not be taken lightly. Give yourself time, check the offers of several banks. Give all the same obligations to be consolidated to everyone. The basic parameters that you should get are:
A consolidation loan is the same debt as any other. It is based on the fact that the money obtained from the bank is allocated for a very specific purpose. For example, for the repayment of other loans and credits. Once you get a consolidation loan, the bank does not transfer money to your account. Only directly to the accounts of the institutions in which you are in debt. In this way, your “old” loans are repaid. And you now have a new creditor who you have to handle monthly installments.
Many banks, such as Meteor Bank or TFY BP, offer consolidation loans with additional cash. The bank allows you to pay one lower installment. It also offers an additional loan that you can use for any purpose.
It is sometimes the case that the creditworthiness of a person does not allow for the cheapest loan. However, there is still a chance for a cheap consolidation loan that will reduce your previous installments. Sometimes the problem is not the size of installments. And different payment terms of many installments which may cause you to lack cash before paying out and fall into the spirals of debts.