What is the Consolidation of Bank Loans and Why Installment is Smaller

You pay off some loans and credits? You can repay them all (with a new loan) and have only one loan, in one bank and pay only one installment. What is it about?

For example, you have several loans and credits. You also pay back: a cash loan of € 15,000, a loan for € 10,000, in another bank you have a debt of € 6,000 on your credit card and € 4,000 on your bank account. Well, there were installment installment installments – € 25,000. In total, the debt is about € 60,000.

Each month you pay 3 loan installments in the total amount of € 1,500. And, in addition, there are “fees” for using the account limit. And yet your income has decreased and the amount of installments begins to weigh heavily. What can you do then?

Credit consolidation

Credit consolidation

In this case, it is worth considering a consolidation loan. If you have creditworthiness, the bank, when granting a consolidation loan, repays all bank liabilities, and you have a new loan with one installment, probably a much smaller one, for € 900. This is decided plus consolidation loans. And the cons?

First of all, the fact that you pay more for a loan: the loan period is extended, and thus you will pay interest more. In addition, the new loan also includes additional fees, including commission or insurance.

Sometimes, however, there is no other way to regain financial liquidity and heal finance (however strange it sounds) than debt consolidation and lowering the loan installment. Offers for consolidation loans can be found in each of the banks. Some are better, others are worse. There are cash and mortgage consolidation loans. The comparison of consolidation loans is a basic task. The choice depends on our creditworthiness, credibility, size of consolidation, its duration and form of security.