The concept of loan consolidation certainly does not need to be introduced to anyone. It is a consolidation of loans of any number. Replacement of different financial liabilities by one, which is connected with better repayment terms, better transparency and sometimes extra money. However, a lot of mistrusts and “bad guys” about the consolidation of loans have left a lot of myths and misrepresentations into the world that we will introduce you to and explain.
Loan consolidation is primarily intended for bank loans
The first untruth that you must not catch on. Consolidation is suitable for merging bank and non-bank loans. Often you don’t have to limit yourself by the number or type of monetary obligation. For example, we will list products suitable for consolidation.
- Credit Cards
- Consumer loans and more
Large penalty fees
Many argue that consolidating loans will help you merge several loans, but on the other hand, you will face high fees for some services. For example, early repayment of a liability. This is, of course, utter nonsense. This is to some extent an amendment to the Consumer Credit Act from the end of last year. This limits sanction payments at least to some extent. In addition, you can choose to consolidate with a financial service provider whose business terms and conditions will suit you best.
Prepare for demanding administration
Consolidation is associated with lengthy paperwork and everything takes a lot of precious time. Another misleading message that doesn’t pay much attention to its content. Today’s banking and non-banking companies are quite flexible in this respect, so don’t worry about the above. Consolidation can be handled even through web-based requests if you can deliver all the required documents to the new service provider.
The entire paperwork process is handled, among other things, without your intervention and wasted time. If you have everything you need, the consolidation requirement will only take a few minutes. Depending on the number of loans to be merged and their terms and conditions, you will often obtain a new loan with more advantageous repayments within a few days.
If you want a lower installment, count on increasing the total maturity
Even in this case, you do not have to worry about the truth of such a claim. Because most banking and non-banking companies approach your clients individually, you have your future repayment obligations almost fully in your hands. You can also get a variety of loyalty programs and similar events that can make your future installments cheaper. In addition, you have the opportunity to get some extra money.