It started quite innocently. You have received a credit card and although you did not want to use it, you soon got to the limit.
It was not a problem because your income allowed you a fairly comfortable repayment, so there was no reason why you would not be inclined to offer other credit companies.
From one magic card, there were several cards at a time – and if it was not enough, you got a consumer credit.
Finally, it’s a big financial junk because you have accumulated payments and the domestic budget has dropped significantly.
How come out of it? Maybe you can help consolidate your loans.
What is the essence of consolidation and who pays off?
Consolidation, not meeting financial obligations, is certainly not one of the hot news.
On the other hand, almost all banking institutions and selected non-banking companies have offered the product for quite some time.
Consolidation consists in the payment of all existing receivables, which prevents the consumer from paperwork and repayment of several monthly installments.
Merging usually reduces the amount of monthly repayments, which will be appreciated by everyone who counts every crown.
Who can consolidate?
Loan consolidation is intended for anyone who meets the specific conditions of a bank or non-bank.
These are usually not different from the conditions under which a normal loan can be obtained because even consolidation is basically a loan like any other.
Most types of credit – credit cards, overdrafts, consumer loans and specific non-bank products such as a loan can be merged into account .
When is consolidation not paid?
However, it is not appropriate to treat financial obligations as a “panacea”.
There are several situations where a different solution is better:
- owners of real estate may pay the existing obligations by US mortgage,
- consolidation is not beneficial even in the case of a student loan or a loan with a significantly low interest – this would increase sharply after the merger.
One loan is better to refinance
If you are bothered by only one loan that you will pay for a long time, consider refinancing rather than consolidation.
If you make a commitment to transfer to another creditor, it will not only reduce the amount of the installment but also the interest rate. In the final you will save a considerable amount.
However, prepare for the refinancing of the loan is conditioned by adequate creditworthiness and payment morality (ie no records in the negative debtors’ register).
Commitments can also be combined with a loan from people
Another way to get rid of several financial obligations is to pay for them by a P2P loan or a loan from people.
It’s possible to get it through a platform such as company (running Home Credit) and has been a popular alternative to classic credit in recent years.
In the case of this form of refinancing, there is also a chance for consumers to register in the register.