The analysis of debt in 2016 revealed that over 2 million inhabitants of our country have problems with the timely return of a financial liability. According to forecasts, this is an increasing trend. Detailed studies based on data from business information offices have shown that every third person in the age of 30-39 years has a loan or loan. Such a situation may be caused by the fact that such financial products as cash loans or online payday loans are widely available. In addition, thanks to an efficient debt registration system, we have more and more reliable data on the levels of indebtedness of Poles. Although these numbers seem to be overwhelming, young people often have no choice but to lend money to current needs. This is primarily due to the consumption lifestyle and expensive housing market. The result of this is the repayment of many loans or credits, which may result in serious financial problems. It is very easy to disturb your own home budget and lose your financial liquidity. for a critique

What is the consolidation loan?

What is the consolidation loan?

Debt consolidation is nothing more than a combination of loans and credits taken into one financial commitment. In this process, the interest rate is unified, as well as the loan conditions themselves. However, the repayment period is extended accordingly. Such a merger of loans proposed mainly by banks concerns only those debts which the consumer is obliged to pay to other banks. In short, payday consolidation is not offered by institutions from the banking sector. It is also important that we can sign a debt consolidation agreement with any bank that offers this type of solution. It does not have to be the institution where we currently have an open bank account.

A consolidation loan is a proposition of support for indebted people. However, a negative credit history in the form of an entry in the database or other credit bureau is synonymous with a refusal to provide consolidation. In addition, this solution proposed by the banks is addressed to customers who have adequate creditworthiness.

The main advantages of consolidation are:

  • payment of one installment instead of several
  • reduction of credit servicing costs
  • a lower installment in relation to the sum already paid
  • longer repayment period
  • short waiting time for a credit decision

What types of financial products can be consolidated?

Banks offer consolidations of various types of financial obligations. The standard consolidation of loans and credits includes: cash loans and installments, car loans, consolidation loans, all limits on the savings and settlement account and credit card charges. On the other hand, mortgage consolidation means the possibility of combining financial obligations along with a mortgage loan into one loan. At the same time, the security for the new loan is given to the real estate on which the mortgage is imposed, and the main purpose of the consolidation is its repayment.

Additional cash

Additional cash

People who decide to combine such loans with several loans have the chance to apply for additional cash for any purpose. Although this should be approached with caution, as this is another financial burden. The amount of the proposed “extra-curricular” money depends on the amount of the consolidation loan itself and depends on the applicant’s creditworthiness. Such additional cash is a kind of loan proposed together with debt consolidation. So before we want to get it, let’s look at the costs we will incur when paying our consolidated liabilities.

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