Is it possible to pay less by combining existing commitments by choosing the Consolidation Loan? YES!
This is possible when you choose a well-chosen Consolidation Loan. Most importantly, it can be a very profitable step – the condition is knowledge of the rules governing credit.
In this post, I will introduce you to the Consolidation Loan offer. I will discuss its design, advantages and compare the best offers on the market in the form of a ranking.
A Consolidation Loan is nothing more than a special-purpose loan intended to pay off other liabilities. Thanks to this solution, our home budget will feel great relief. We exchange many installments for one, usually much lower. Recently, we can notice a growing interest in this type of product – no wonder! This is a good way to save time and money, giving you the opportunity to stabilize your financial situation.
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We often hear this question from our clients. It is most justified, because in order not to lose, you need to have the right knowledge: when and what offers are worth consolidating.
First of all, you need to look carefully at your financial structure and debt level and decide which loans to pay back under current conditions and which ones to match. You can consolidate, among other cash loans, car loans, home loans, credit cards, overdrafts, and non-bank products. Importantly: there is no need to consolidate all your liabilities!
You already know what to consolidate and what not. We can now proceed with the application. How to prepare for it and which bank to choose?
First, prepare all necessary Consolidation-Now documentation required for the process of applying for the cash consolidation loan. By default, they include:
- ID card,
- document confirming/indicating the loan repaid, eg loan agreement, last credit card statement,
- proof of income
- loan application.
The second step is choosing the right bank to which you want to direct your inquiry. A good solution is to simultaneously submit applications to several institutions to be able to compare available offers.
Is it worth using the offer Consolidation Loan?
Although by definition, the Consolidation Loan should lower our monthly liabilities and improve our creditworthiness, the wrong one can have the opposite effect. That is why such an important step when choosing an offer is to check its profitability. Remember that a lower installment does not always mean a cheaper loan, and shortening the loan period may, for example, result in an increase in creditworthiness!
Why is this happening?
When we take a Consolidation Loan, the loan period is often extended. As a result, the installment is lower, but the sum of costs resulting from the longer repayment period means that the real cost of the Consolidation Loan exceeds the sum of the costs of combining loans.
A well-chosen consolidation loan is one that not only has a lower installment than the sum of the installments of consolidated loans but in the end, it is cheaper!
Creditworthiness. Key to success.
When applying for a Consolidation Loan, as in the case of other liabilities, you must ensure adequate creditworthiness. More precisely: tailor the offer to your ability. Importantly, in the case of the Consolidation Loan for calculating creditworthiness (the possibility of repaying its obligations together with all costs) installments of repaid loans are not taken into account.
Regardless of the circumstances, the bank will thoroughly analyze your situation based on a creditworthiness test. For this purpose, this institution will analyze your credit history using a report provided by the Credit Information Bureau (BIK for short). It is worth mentioning at this point that the data in BIK is not always current as at the date of application. It may happen that the amount to be repaid under the Consolidation Loan in the downloaded BIK report will differ from the current amount to be repaid. This situation may eg be the result of the lack of an update of the BIK report.
Currently, every retail bank has a Consolidation Loan offer. However, before you submit an application, you must be sure that you meet the boundary conditions of the offer. There are many of these parameters and it may take a long time before you can get to know the details of each of the Consolidation Loan offers.
Below, in the form of the Consolidation Loans Ranking, we present the three best offers currently on the market. The calculation takes the form of a representative offer for a loan amount of USD 60,000, under which two products are consolidated. The loan period we have adopted is 60 months. Remember that the offer in each bank is individually tailored to the client, among others in terms of transaction risk, scoring and even his place of residence!
The consolidation loan undoubtedly has a lot of benefits. From changing many installments into one, saving time, ending with the reduction of monthly liabilities. The Consolidation Loan is a great solution for people who have several loans and the date they are taken is when the level of interest rates was high.
Have you decided on a Consolidation Loan? You need to prepare yourself! Creditworthiness is crucial, as is the need to pay the installments on time. It is worth consolidating loans and reducing installments, but only knowing the answers to the questions: how, when and in which bank.
Consolidation loans are one of our most important offers. We have already helped dozens of customers reduce their monthly installments, thanks to which they were given the opportunity to pursue their other goals. If you are also interested in consolidating your loans and want to be sure that this will be the best solution for you – contact us!