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A debt relief loan in the bank will effectively lengthen us from debt? What is a debt relief loan and whether it allows you to get rid of debts? Where to go for such a loan? Read the following guide on debt relief.
If we are over indebted, unfortunately no credit will help. The new loan, only in certain specific situations, can help us regain financial liquidity and even repay non-bank loans. On the one hand, you must have creditworthiness and creditworthiness. On the other hand, we increase the amount of debt and the costs associated with its repayment.
How is excessive debt created?
All you need is to take out new loans (bank and non-bank at the end), have a few credit cards and a limit in your account. Remember that any over-indebtedness starts with one loan / loan and is usually preceded by a lack of reliable analysis of debt repayment options (now and in the future). Then, there are problems with settling the installments. And then we take one or more of the following actions:
- we borrow from friends / family to pay the installments,
- we borrow in loan companies,
- we contact the bank on postponing the installment payment,
- we are contacting the bank regarding the renegotiation of the loan agreement,
- we consolidate debt and reduce the installment,
- we’re selling off assets,
- we start saving.
The worst solution is, of course, a loan to pay back the installments. It is a straight way to large ( REALLY BIG ) financial problems. What to do in this situation? Surely you should start saving, maybe sell what is unnecessary and think about debt consolidation.
Debt credit What is it?
It is nothing more than a consolidation loan. A debt loan is not at all indebted (because there is simply no loan that would lengthen us from debt), and it is only a consolidation of several debts into one loan. What’s more: it makes our debt… grows. Such a consolidation loan can be found in the offers of many banks, but the differences in offers are very significant.
- usually has a lower interest rate than a cash loan,
- the ability to consolidate cash loans, installments, cars, mortgages, debts in bank accounts and on credit cards,
- allows you to replace all these loans with one new loan in one bank and reduce the loan installment (it is smaller than the sum of installments that we have paid so far),
- allows you to get extra cash (from which we can repay debt, for example in loan companies, but we have to do it ourselves, because the bank will not do it for us.) Let’s also remember that there is no such thing as a non-bank consolidation loan. Loan companies only offer cash loans and it can be advertised as a consolidation loan),
- in general, it increases the debt: the installment decreases due to the extension of the loan period, and thus we will pay more interest; there is a commission and other fees for granting the loan; old credit agreements may include the need to pay a commission for early repayment.
We can divide the bank debt loan by type into:
- cash – the maximum loan amount is usually € 150,000,000, unsecured, granted for a maximum of 10 years.
- mortgage – the mortgage (housing) is also subject to consolidation, apart from other loans, the security is real estate, the amount of the loan depends on the value of the property, granted even for 20-30 years.
What to look for when choosing a debt loan at the bank
Choosing the best offer is not a complicated thing, because there are a lot of proposals for loans in banks. All you need to do is check the offers of consolidation loans, contact the bank, choose the appropriate loan: cash or mortgage, compare the total cost of the loan and choose the best one. Simple? An important factor is of course the repayment period, but for a certain period (depending on the amount of the loan) the differences between the monthly installments will not be significant.
The amount of interest paid depends on the nominal interest rate. The lower the nominal interest rate, the less the loan will cost us. We also pay attention to whether the interest rate is fixed or variable.
Fixed means that the installment will not change throughout the loan period. The interest rate remains at the same level throughout the entire loan period.
Variable interest rates will be adjusted to changes in interest rates set by the Nat. Dismissal, this is a reduction in the interest rate on our loan, but an increase means that our interest will also increase.
The maximum loan amount and the possibility of obtaining additional cash can also be of great importance. Especially for those who are heavily indebted. But is it worth getting even more debt?
How to get a debt loan?
Regardless of what the loan is, it is necessary to have the necessary creditworthiness and creditworthiness. When submitting a loan application, we will have to present documents proving income, the amount of our obligations, expenses for a household, contract of employment. In addition, he will check our credit history at BIK. In this way, we will assess whether we are able to pay off the new liability. We also need to prepare all loan agreements for loans that we want to consolidate.
However, let us remember that signing a debt loan agreement is, after all, a loan and debt that we have to pay back. It allows you to heal the situation and regain financial liquidity. But it is necessary to take appropriate measures to reduce spending and save at the same time.
Debt relief loan in a bank – a guide from the cycle “It’s worth knowing. Before you borrow “