Online debt consolidation loans – How to do debt consolidation: contact us
Contact us if you want to know how to do debt consolidation
Debt consolidation is, in a nutshell, a combination of liabilities held into one. De-Debt logo, whose debt consolidation services we may use will pay off our debts, while it will grant us one larger loan. This new, consolidated commitment will be spread over a longer period, therefore the monthly installment will be lower than for several smaller loans. Thanks to this, we can easily plan our budget and manage finances, because we include only one monthly payment. In addition, it is usually set at a level that should not be too heavy for the debtor.
The decision to consolidate cash loans must be carefully considered. A good way to orient yourself is to check the offers of several banking institutions. The debtor should collect all liabilities to be consolidated and present them in exactly the same form to different banks. Comparing the proposals that the borrower will receive will be very helpful when choosing the right debt consolidation offer. What should be considered when analyzing individual bank proposals?
1. The value that will be of the most interest to the debtor will be the amount of the new monthly installment. And rightly so, if it is lower than the sum of individual commitments, you should look at this offer.
2. Another factor to compare is the total outstanding amount. There is nothing to hide, most likely it will be higher than the sum of current, individual liabilities. The closer it gets to the value of broken debts, the better.
3. A loan consolidation usually extends its repayment period. Basically, however, the shorter the time to settle debts, the better.
4. The APRC interest rate will also be an important indicator. In short, this is the total cost of debt consolidation which also includes the commission charged by the bank.
A comparison of the above information should give the debtor the basis to choose the best offer. However, if it is still too difficult a decision, it is worth consulting a person who is more familiar with loans. It is necessary for this to be a trusted person, not a financial advisor – usually, their goal is to sell the offer on which they will earn the most, and not choose the right solution for the debtor
How to choose the best solution?
As with other commitments, we should consider the costs when looking for the best solution. You should compare the offers of both individual consolidation loans and those regarding our current liabilities. It may turn out that consolidation of mortgages with low-interest rates with other smaller liabilities is unprofitable.
– In the event that the interest rate on the consolidation loan will definitely increase the total cost compared to existing liabilities, it will turn out that we will simply overpay. This may happen if we want to combine repayment of low-interest long-term loans and e.g. non-bank loans, with a maximum permitted interest rate. In this situation, debt consolidation can be unfavorable, so you should check different options and recalculate all costs.
Loan consolidation as a way for additional funds
Finally, it should be emphasized that as part of the cash loan consolidation it is possible to obtain additional funds that can be used for any purpose. Such an injection of cash, unfortunately, increases our debt, but it often turns out to be necessary. It happens that people think about debt consolidation only when banks no longer want to provide financing. For an entrepreneur who needs cash, e.g. to buy the necessary equipment, consolidation of company loans and reduction of installments will not be a satisfactory solution. The problem is still the lack of free funds, so receiving additional money under a consolidation loan may be the optimal solution then.