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Loan consolidation is one of the regular offerings of banks and non-banks. Although households use it mainly when they get into trouble with repaying loans, they can pay off even if the household repays its debts properly.
Payday loan consolidation means a reduction in costs or repayments incurred to repay more payday loans drawn at once by merging into one loan. Payday loan consolidation will allow reducing their monthly repayments by as much as one third or more, and at the same time draw on a new loan. Help me somebody…
For borrowers who have problems with repayment, credit consolidation should go ahead before it is delayed with the first installment, because at that moment they get a negative record in the debtors register. Any further consolidation or refinancing is much more expensive and difficult for them.
Compared to more agreed loans, one fee is one advantage of one consolidated loan. And often more advantageous interest. With the right choice, thousands and tens of thousands of crowns a year can be saved. Nevertheless, in consolidation, the borrower should always be aware that the monthly payment is reduced to him at the cost of extending the total repayment period. This also entails a longer repayment of credit management costs.
Loan consolidation is possible for all types of loans
Virtually all credit products can be consolidated or refinanced today. Mortgage loan, consumer credit, car leasing or building savings loan. However, some banks may refinance, in addition to bank loans, loans from selected non-banking institutions. Sometimes, however, consolidation can also be associated with some obstacles. Such as the expiration of the mortgage fixation or the reluctance of banks to include credit card loans in one loan.
At the same time, experts do not highly recommend – if it is not a condition of the credit provider – to arrange for a consolidated new loan insurance against inability to repay it. The reason is that there are many exclusions in insurance terms and this insurance significantly increases the cost of credit.
Loan consolidation always means a new loan
In consolidating, banks adhere to the same principles of assessing the client’s creditworthiness as any new loan. In credit registers, the bank verifies the client’s installment morale. It is the client’s responsibility to provide the bank with all information about its income and expenses. Furthermore, the contracts on the basis of which the loans that it wants to consolidate were closed.
Most banks now offer “free” consolidation or refinancing. That is, the cost to the client may be, for example, in the charges for exposing the debt. When consolidating with the same bank in issuing early repayment of old loans. In the case of loans secured by real estate, a new estimate of the property is made.