Consolidation loan – a fraud or a way to get out of debt?

 

Credit consolidation is not a fraud unless it is considered in the categories of a debt relief loan or the bank’s help in repaying the client’s existing obligations.

Can I afford a consolidation loan?

Can I afford a consolidation loan?

Consolidation loans in the category of cheaper solutions cannot be considered, because in practice they are not. Most often it is only a way out of the so-called a spiral of debt, when the client repays several installments a month, at different times, often to different banks. In order not to do so by paying one principal and interest installment to one bank, consolidation can be made. It will organize the client’s financial situation and prevent a deeper collapse in the debt spiral.

At the same time, you must be aware that the decision to consolidate is in fact the decision to take another loan. Therefore, when deciding whether to grant a consolidation loan to a given client, the bank will consider whether the client has sufficient creditworthiness. Fill out the contact form and check if you can get a consolidation loan »

A consolidation loan cannot be equated with a debt relief loan. They are two completely different credit structures. The purpose of consolidation is to organize credit obligations and obtain a lower monthly installment by extending the loan repayment period.

Credit necessity

Credit necessity

Before issuing a positive credit decision for a customer applying for a consolidation loan, the bank thoroughly checks its creditworthiness. Requests information from the Credit Information Bureau. If the customer is in arrears on current loans, he is already the debtor of the banks, then there is probably no chance of consolidation. Loss of borrower’s financial liquidity results in the inability to take a consolidation loan.

A solid credit history and stable income as well as the possibility of securing the repayment of a consolidation loan in the form of a mortgage on real estate usually give you the opportunity to achieve consolidation.

Clients who think that the bank is reaching out to them with a helping hand and as part of consolidation will help reduce the cost of repaid loans and credit cards, are even more will. The core of consolidation is the combination of all financial liabilities in banks into one loan, which is incurred for a longer period of time than the existing loans. Thanks to this, the capital pool, together with interest that the borrower owes to the bank, can be spread over a longer period. You have to be aware that a longer loan period means that the bank will charge interest on your liability for longer. Therefore, total loan costs will increase.

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