A consolidation loan where it is easiest to get to consolidate bank debt. Compare and select a consolidation loan at the bank. Thanks to this, you can reduce the amount of monthly installments.
The advantage of consolidation loan is also that it facilitates budget management to a large extent – one loan installment, but also increasing creditworthiness.
We already know that consolidation means saving time, but not necessarily money. Why?
Consolidation of loans on what it is
A consolidation loan or a consolidation loan is a loan product that allows you to ” combine ” several credit obligations into one loan. Such an operation allows you to reduce monthly installments by extending the loan period. In addition, the consolidation loan will be subject to a lower interest rate on the cash loan.
So instead of a few loan installments (differently interest-bearing), with different payment terms, consolidating debt, we have only one loan, with one installment payment date.
Lowering the loan installment is the main reason for consolidation. The reduction of the installment is, however, mainly possible by extending the loan period. This means that we will pay more interest on the loan, thus the loan is more expensive than if we did not consolidate the debt. In addition, the new loan also includes additional costs (commission for its granting, possible credit insurance, additional fees).
The decision on credit consolidation should be well thought out, taking into account all its pros and cons.
What is subject to consolidation? It all depends on the bank’s credit offer. Loans and cash loans are the most common types of consolidation. In addition, you can consolidate installment loans, car loans, credit card debt and ROR accounts. WHAT MORE : You can also consolidate your mortgage.
How to choose the right consolidation loan?
You already know that consolidation allows you to regain financial liquidity, because the burden on the household budget will be lower in the case when the installment of the consolidation loan will be lower than the sum of installments paid previously.
To find out whether a consolidation loan will be profitable, just contact one of the selected banks. Before that, however, analyze your current debts, because it is not always worth converting all liabilities into one. For example, there is no point in consolidating a loan that is almost paid off.
Similarly to other loans and advances, the following factors affect the amount of the consolidation loan, and thus the cost of the loan:
- the sum of the loan,
- interest rate,
- type of interest,
- repayment period,
- selection of loan installments (fixed or decreasing),
- credit payment date and payment date of the first installment.
When comparing consolidation loans, pay attention to the value of the APRC of the loan and the total cost of the loan. Their amount in comparison with the same offers in other banks allows to determine if it is a cheap or expensive consolidation loan.
APY – Actual Annual Interest Rate – is the most important information about the cost of credit. It contains all loan costs in a percentage per annum.
Consolidation of several loans and credits
Assume that you want to consolidate:
- cash loan at 5,000 euro, there are still 36 installments – months, nominal interest rate 8%.
- car loan for 40 thousand euro, 60 installments – months, the nominal interest rate of 5% remains to be repaid.
Assuming that the nominal interest rate on the consolidation loan has been set at 5% per annum, and the repayment period will be fixed at 9 years, the installment will be about €580. It is over €400 less than before.
And what is the representative example of any consolidation loan?
Amount of consolidation loan: €78 480.
Loan period: 9 years and 6 months.
Variable interest: 5.9%.
The total cost of the loan: €30,676.82.
The total amount to be paid: €109 156,82
Credit installment: €957.52.
Always remember that the final loan terms depend on your creditworthiness and creditworthiness.
Finally, we will answer briefly the question: consolidation loan, where is the easiest way to get? In any bank that determines you have the right creditworthiness and creditworthiness. The better your scoring by the bank, the better credit you can count on.