How to consolidate loans?
Consolidation as a banking product has become something very common among indebted people. It is thanks to consolidation loan review that the client can combine several of his obligations into one, often with a lower installment. Consolidation loan is most often needed when the sum of all customer installments exceeds their income. A person in debt works then only to pay the installments with nothing to live on.
4 principles of proper consolidation
A customer who would like to take advantage of the opportunity to consolidate their liabilities should pay attention primarily to the four most important aspects of a consolidation loan, which are:
- The number of installments and the period for which the client takes a consolidation loan. A customer who would like to consolidate their payday loans should choose the number of loan installments to be able to pay it back easily. However, the borrower should also remember that he cannot decide on too low installments because then he will extend the loan period and thus incur higher costs of the consolidation loan. It is best if the client has the appropriate installments to his financial situation, which are not too low to not extend the consolidation loan period excessively.
- The right moment to apply for consolidation of payday loans. A person who is seeking consolidation should remember that any delay in repayment exceeding 60 days is recorded in the Retro registers. Any such information often closes the client’s ability to take consolidation – banks “do not like” clients who have delayed payment of installments. If the customer wants to take advantage of the consolidation of payday loans, he should do so before he has delays in paying the installments.
- The loan amount for consolidation of payday loans. Very often, clients will receive an offer of debt consolidation along with receiving additional cash for any purpose. However, such an offer causes the customer to become even more indebted, i.e. it worsens even such a bad financial situation. It is best if the customer borrows only as much as he really needs for consolidation.
- Payday consolidation with a loan or consolidation loan. For a person who would like to consolidate their payday loans, a consolidation loan at the bank will be the cheapest. However, not every bank wants to consolidate payday loans or other non-bank loans. In this case, the customer may take advantage of the offer of non-bank companies consolidation. Unfortunately, APRC in non-bank institutions is twice as high as in a bank.
Debt consolidation by indebted persons can often be the only solution to get rid of debts painlessly. However, such a consolidation should be carried out by the indebted person so as not to fall into even greater debt. To this end, it is worth using the assistance of professional credit advisers.