View how to consolidate payday loans
Perversely, I can say that there is little in a situation where consolidation loans do not pay off. Everyone who has more than one payday loan should consider changing many payday loans into one loan, with one lower installment and read this article. I will answer why.
First, however, I will mention what a consolidation loan really gives:
- One lower loan installment instead of many
- One payment of loan installments a month
- More money in the portfolio available each month
- It reduces the risk of falling into the credit loop
- Ability to collect additional cash with a consolidation loan
- Positively affects creditworthiness and credit rating at Database
There is of course nobody or anything without faults.
The downside of a consolidation loan is usually only one – it is difficult to get it. I have even written an article on this subject: 15 most common reasons for refusing to grant a cash loan. Fortunately, Refinance took care to solve this problem. You can take advantage of a free consultation, where we will drastically increase the chances of getting a consolidation loan. If you are a shark yourself, you can also apply to the bank by using the Shark Finance consolidation comparator.
When the consolidation loan pays off?
The profitability of taking a consolidation loan must be considered from several perspectives: the risk of not being able to repay loan installments on time, an accident, comfort of life and from a typical financial perspective. I will mention situations in which you should definitely consider refinancing your loans – that is consolidation.
Installment loans are too heavy a burden
In fact, 80% of people who write to me about a consolidation loan have serious problems with paying their debts. For most of them, unfortunately, it is too late to be saved, because they no longer have the chance to obtain a consolidation loan.
A wise borrower does not allow a situation in which he is late in repaying a loan installment. However, life shows that the Pole is most wise after the injury. After all, if you are reading this article, remember that banks are able to refuse a consolidation loan to people who have been late in repaying some obligation, even by only 14 days. The over 30-day delay in repayment of the loan installment in the overwhelming majority of cases negates the chances of merging loans into one with a lower installment. Also, more than 6 open credit commitments are often a sub-franchise situation – banks rarely want to consolidate so many liabilities – you must be an outstanding credit specialist to get consolidation in such a situation.
Historically the lowest loans in the history of banking
Think also about the fact that we live in times of the lowest interest rates in the history of banking. This means that the interest rate on loans is the lowest over approximately 100 years. A warning light is already flashing in your head. You know well that the interest rate on your loans is probably volatile. Banks give fixed interest rates on loans usually only up to two years.
The conclusion from this is that it is good to have a reserve in the home budget. By reserve I mean the amount of the loan installment, that even after an increase of 20%, it will not make you have problems with paying off your liabilities.
Act preventively and change your loans to one with a low installment already… especially as you need extra cash.
I have loans but I need more cash
Here, a consolidation loan is often an ideal solution due to the cost of the loan. A consolidation loan is usually offered on better terms than regular cash loans, credit cards etc. Interest and commission are often lower than in the standard cash loan offer.
Exchange of more expensive credit for cheaper loans
I often encounter a situation where readers have borrowed on very poor conditions. 10% interest rate, 10% commission, and insurance… this is not a rare case. In this situation, the consolidation loan means that the new loan may have a lower installment and its total cost may be lower.
Shark, and when a consolidation loan is unprofitable?
Often, to reduce the installment, the loan period is extended, which may mean a higher total cost of the loan than the previous one. In practice, however, if someone already has 2-3 credits and more, consolidation often pays off not only in terms of the amount of the installment but also the total cost of the loan. A lot depends on what conditions the existing loans were incurred and how many of them were still to be repaid.
If your existing cash loans had a commission paid in advance, and not included in the loan installment and additionally in the consolidation loan, you extend the loan period considerably, this operation may not be financially profitable. By “financially” I mean the total cost of the loan. You will get a lower installment, and thus you will also increase your creditworthiness.
It is a very difficult task for an ordinary person to calculate whether the merge operation is profitable. For my clients, of course, we do calculate profitability in this respect. Sometimes it is more beneficial for people with high creditworthiness to take another cash loan. Of course, I am talking here about the cases of borrowers for whom the installment is not the slightest financial problem. However, even wealthy people want to have more cash available each month (they want to pay lower installments), which is why they use consolidation loans and cheap cash loans on the blog.
At the end I put credit tools, which I mentioned in the article.
- Consultation – assistance in obtaining a consolidation loan
- Comparison of consolidation loans
- Comparison of cash loans
You can also find more loan guides on my blog in the credit department.