A favorable consolidation loan for the consolidation of debt resulting from many liabilities. Check where consolidation can be made and in which bank the loan for this purpose is favorable.
The consolidation loan consists in the “combination” of all our loans and credits into one loan. The borrower signs a consolidation loan agreement with the bank and the bank repays from the loan the liabilities presented for consolidation.
It is a good way to regain financial liquidity and creditworthiness. By consolidating debt, we reduce monthly liabilities – the loan installment is usually much smaller.
Consolidate, depending on the bank selected, you can:
- credit cards,
- debit on bank accounts.
Banks also often offer a consolidation loan with additional cash. For any purpose. Why do we need extra cash? Should we fall into the debt loop? After all, we use a consolidation loan to improve our finances.
And if, in addition to bank loans, we still have non-bank loans? And here, additional cash, is the opportunity to pay off all kinds of non-bank loans. This does not mean that the bank will repay our non-bank liabilities, only as part of the consolidation loan we will get extra cash (cash loan), which we can use for any purpose.
The cost of consolidation loan
The costs in the consolidation loan are similar to other loans: the nominal interest rate of the loan is determined on the basis of jabank rates. Another cost is the percentage commission on the loan amount. There may also be additional fees, such as loan insurance, and even payment for processing the application, administrative or preparatory. The latter three charges are more associated with loan companies, and not with banks, but this is how it may look. With a consolidation loan, we can also pay the costs related to the early repayment of our old loans – this should be checked in the contracts whether there is such a fee and how much it is.
Comparison of consolidation loans
When looking for bank offers and consolidation loans, you should check the credit costs by comparing the APRC (Actual Annual Interest Rate), the lower the APR, the cheaper the loan is. As you can see, to find the cheapest consolidation loan or a favorable loan for debt consolidation, you should compare the offers of several banks (even 3 offers will suffice) and from this list create a ranking of consolidation loans and choose the only, the best bank.