Look at the best ways to consolidate your debt
If someone has to pay several liabilities to banks, then a consolidation loan may be a good solution. The instructions given by our experts show that debt consolidation often allows us to significantly reduce the cost of borrowed money and significantly simplify the process of paying off debts.
The bank chosen by the borrower allows the repayment of several existing debts, in return offering one loan covering the amount necessary to return. The consolidation loan can be used to repay consumer, home and car loans as well as an overdraft on the borrower’s existing accounts or credit card debt.
Several loans (especially loans in cash and on credit cards) can be converted into one – the most profitable option here is usually a mortgage. Interest on such a loan is usually a maximum of 6-9 percent. Meanwhile, the interest rate on cash loans is about 15% higher. As for the credit card – after exceeding the interest-free period, the percentage is very large – many cards reach the maximum legal limit, which is currently 24%.
Also, a client who does not own real estate can take a consolidation loan
The condition of profitability is finding a bank that offers the lowest interest rate on a loan without a mortgage (it can be 10-15%). However, here the savings will be less than with a mortgage.
Thus, by consolidating your loan you can save on interest. But this is not the only advantage! Often, it is possible to spread the repayment over a longer period of time. Note here: when deciding on such a move, you need to be aware that usually the amount that you will have to give back to the bank will increase compared to what you would have to give back after a shorter repayment time.
Repayment of several loans at the same time often involves the need to make several transfers at a bank branch. One such transfer can cost up to PLN 5. Multiplying this amount by the number of monthly transactions and the number of months that the customer has to repay, it may turn out that the amount allocated to these fees will be significant – on the order of several hundred zlotys. Then reducing several transfers to one – which happens in the case of loan consolidation – can help reduce borrower’s expenses.
However, you should exercise caution
And caution when making consolidation decisions. Not everyone pays off. It is necessary to check whether the value of the property is sufficient for the bank to grant the loan in the amount needed by the client. Real estate valuation made by the bank causes additional costs for the borrower of several hundred zlotys (PLN 200-500).
For this reason alone, the bank will not always decide to grant a mortgage-secured loan. The bank also analyzes what percentage of the client’s income will be spent on repayments. He will not grant a loan if a borrower earning below the national average would have to pay more than 50 percent a month. your earnings. The bank will refuse a loan to a customer with earnings above the national average when the interest would absorb more than 65 percent. his salary.
Experts from the financial comparison website Comperia.pl inform that the consolidation loan is not available immediately. As a rule, you should wait for the bank’s decision (sometimes up to several weeks). In addition, a commission fee may be required from the customer (a few percent of the debt value – 2-3 percent). It is also necessary to fulfill formal obligations – i.e. to submit a document on employment as well as on earnings and financial standing. To this should be added the cost of changes in the mortgage book, as well as credit insurance (until the entry in the mortgage book).