When at some point we cease to control domestic expenses, then it is worth considering debt consolidation. Instead of repaying a few installments in various branches and instructions, you can bring them together in order to pay only one loan in a monthly installment. Thanks to this, our debt is matched to our financial capabilities. Relieving the home budget by extending the repayment period and reducing monthly payments helps to go “straight”.
Of course, all loan advertisements without certification, consolidation loan or cash loan sound like the most inviting. However, before making a final decision it is worth considering whether in this case the consolidation loan will turn out to be really profitable .
Organize your consolidated loans
The most commonly used step in organizing a consolidation loan is to extend the repayment period . However, this also will not go unnoticed for our portfolio, because the longer repayment period means more costs in total. Will we be ready to repay a larger amount? It is worth to calculate it carefully, so that you do not regret your decision later.
However, often people who decide on a consolidation loan have no other option and are willing to incur high costs. It is easier to remember one installment than to pay off a few, the more so that each has a different deadline for making a transfer.
Is there a chance that despite the increase in costs
The consolidation loan will be profitable at all? It turns out that in recent years the interest rate has fallen in favor of borrowers, especially those who took out expensive loans and loans a few years ago. At the moment, the interest rate is much better for them. Therefore, the owners of cash or car loans can ultimately even count on reducing the cost of the loan. It is worth considering such a solution because nowadays every discount is welcome. Before we sign a contract for the granting of a consolidation loan , it is worth orientating ourselves in the existing bank branches, how much change will the lender have. Recalculating all costs should give us a clear result of whether this step will be profitable for us.
It is also worth considering a consolidation loan
Which is secured by a mortgage , because the bank branch is then able to grant a much better interest rate than if no collateral is provided by the client. The difference in interest rates between such loans can be as much as several percent per annum. Of course, for such a change to be profitable, the real estate can not be burdened with anything yet. If a mortgage is already on the flat, the consolidation loan is still possible to be incurred, but it will undoubtedly affect the terms of the loan.