Do you have any loans, credit cards or leases and would you like to save? Consolidation or refinancing of loans is becoming very popular, with the aim of saving.
People want to replace their old loans for two reasons. The first is too high interest, which increases the overpayment and hence the disadvantage of the loan. The second is to combine loans into one that will have a lower installment. If the monthly repayments of existing loans take too much money out of the borrower’s budget, replacing them with a consolidation loan may help.
Refinancing loans in the bank through consumer credit
Most often, borrowers decide to refinance or consolidate loans through bank loans. For this purpose, two types of loans can be obtained: either special-purpose refinancing loans or special- purpose loans for anything.
Almost all banks in our country, whether they are “large” and banks or “small” banks such as Good Finance bank, offer refinancing and consolidation loans. Their advantage over non-purpose loans is better interest and in some cases longer maturity to reduce the monthly repayment for a larger loan amount.
At the bank, consumer loans are most often used for refinancing. These can generally be obtained up to a maximum of $ 30,000, which should cover the cost of refinancing all current debts. However, if such an amount is not enough, it is also possible to use the so-called. American mortgage.
Non – bank refinancing and consolidation loans
The former non-bank, now a bank-licensed company, Good Credit, also has a refinancing loan in its portfolio.
Of course, you can also use regular consumer non-bank loans. They have many more providers in their offer and their advantage is that you don’t have to prove, for example, that you used them to pay for old debts. So you can use some of them for anything else.
Several people are in trouble repaying their debts and financial obligations in such a way that they find themselves in credit or debtor registers. However, taking a loan without a register is a big risk today, as serious companies do not offer such loans.
What should be the ideal procedure
If you decide to pay off your old debts, you first need to know under what conditions this can be done and how much money you will need. So let’s calculate the outstanding amounts on your old loans and ask about any charges for paying them off before maturity.
Then add up all costs and look for a new loan that you can get as much as you need. Find out the conditions under which each lender can lend you and, if you meet them, include his refinancing loan in your shortlist.
Finally, select the group of new loans that you like best and whose eligibility conditions you meet. Get specific credit offers, compare them and choose the best one.
What to watch out for the most
You should be cautious and cool-minded when refinancing or consolidating loans. Not every new loan is profitable and equally, not all old loans are worth refinancing.
When refinancing, pay particular attention to the following 3 things:
- Refinancing an old debt is only worthwhile if you save on its repayment or if reducing the repayment will greatly help you in your family budget
- Such an old loan, the early repayment of which is subject to a charge in excess of interest savings, is not eligible for refinancing
- Pay special attention to the remaining maturity – loans that you would have to repay within 6 months, for example, are usually not worth refinancing.