Consolidating loans are one of the most popular banking products in recent years. Above all, the various offers are tempting in that, in the final analysis, we will pay less and the best of just one financial institution for commitments. And it can lift your spirits. Before deciding on a consolidation loan, however, it is worth checking whether the proposed offer is actually as interesting as the advertisements show us.
How does credit consolidation work?
A popular banking product in a nutshell is that we receive a combination of all our financial commitments from different banks into one loan, and thus we will have only one installment to pay. This is usually tailored to our capabilities, because we negotiate separately with the new bank and the number of installments and their amount. In practice, therefore, such a solution should be very profitable for us.
The adventure with the consolidation loan must start, of course, with the fact that we present all our debts and documents proving our creditworthiness. On this basis, we are informed whether such an offer is suitable for us. It is worth remembering that the consolidation loan is most often used by people who have problems with the repayment of successive installments, because they have either contracted too many liabilities or their material situation has changed. There can be a lot of reasons for this. The key to taking advantage of this offer is first of all the reliability confirmed by the history of BIK.
Consolidation for any period
For the client, the consolidation itself is beneficial in that it pays one installment instead of several installments. Even from the point of view of wellbeing, it is definitely a better solution. If the Bank agrees to consolidate, it will primarily impose one common interest rate on the loan, regardless of what the individual loans were charged. The conditions are of course agreed individually and depend on many factors, but we can't expect that this will be a much lower additional cost. In addition, the bank will offer us a longer payback period, because it is generally a long-term product and if we are to cope with the repayment of many liabilities in one package, the number of installments must be relatively larger. In this case, of course, much will depend on our creditworthiness, because it will be taken into account when negotiating the amount of credit and the time of its repayment. In practice, it may turn out that we will not pay less, but the commitment will be adapted to our real possibilities.