Several smaller loans or one larger?

It’s a consolidation loan. Its essence is to convert several obligations into one. In practice, this means taking a new loan to repay existing loans and credits, and then spreading the new debt in installments.

Warning! This is not a solution for everyone. Due to their specificity, only customers who already have at least two different liabilities to banks, e.g. cash loan, car loan, credit card, will benefit from the consolidation loan, and will also repay installments.

When should you consider a consolidation loan? There are several situations in which combining multiple installments into one will benefit you.

If you have a problem remembering the repayment dates of individual loans

If you have a problem remembering the repayment dates of individual loans

If you have many loans and credits, you must remember about all payment dates. In this situation, it is not difficult to make a mistake, oversight, and thus – late payment. The consolidation loan eliminates this problem – it combines all installments into one, with a convenient time for you.

If the interest rate on existing loans is too high

If the interest rate on existing loans is too high

Cash loans in particular have a much higher interest rate compared to consolidation loans. Converting many repaid liabilities into one will allow you to reduce costs. Thanks to this, you can save a bit.

Cash loans in particular have a much higher interest rate compared to consolidation loans. Converting many repaid liabilities into one will allow you to reduce costs. Thanks to this, you can save a bit.

If you want to reduce the monthly installments

With many loan commitments, your monthly installments may slowly approach a dangerous limit and affect your liquidity. If you want to avoid any problems, consider consolidating your existing receivables. The consolidation loan will allow you to reduce the monthly installments by extending the loan period.

With many loan commitments, the amount of your monthly installments may slowly approach a dangerous limit and affect your financial liquidity. If you want to avoid any problems, consider consolidating your existing receivables. The consolidation loan will allow you to reduce the monthly installments by extending the loan period.

Profitability of a consolidation loan

A consolidation loan may be a better option for many borrowers. However, before we decide on it, we must analyze our financial situation. How?

Let’s estimate the interest rate on repaid loans and the total amount of installments. Then compare it with the consolidation loan offer. Only then will we be able to answer the question whether consolidation will pay off.

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