A situation in which the amount of liabilities exceeds the amount of monthly income is not the most pleasant. This means that we have fallen into a financial spiral. Can you get out of it somehow? The only solution may be a debt consolidation loan. What is? Where will they give us? What does applying for a debt consolidation loan look like? Check!
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A consolidation loan is a special-purpose loan that can be used to repay existing liabilities. The borrower decides which liabilities will be consolidated and converted into one. You can combine installments for cash loans, installment loans, car loans, payday loans, overdrafts, limits and credit cards.
There is no requirement that all loans, borrowings or other liabilities held be consolidated. However, sometimes it may also happen that the sum of all liabilities will be higher than the amount of the loan granted. In such cases, we still have to choose what obligations we will leave and which we will consolidate.
Once we decide what commitments we want to consolidate, the financial institution to which we came for help. repays debts to our creditors (banks, loan companies, etc.). Importantly, we do not get this money to pay our own debts.
Then, for the resulting sum, it creates a new loan offer with one installment, which means that from now on, instead of several loan installments, we only pay one. Its amount is set individually, but it largely depends on our financial capabilities, the amount of debt and credit conditions.
In fact, a debt consolidation loan can be found in the offer of almost all banks operating in the country. In some of them, this type of liability is one of the core credit products. We can report to the bank in person, but not only, but more and more financial institutions also give the opportunity to send an application via the website.
It is worth noting, however, that most banks apply quite restrictive rules for granting this type of financing – they expect a good credit history, as well as no entry in the National Register of Debtors and creditworthiness, i.e. we must show that they will be able to pay back the liability we are currently trying to make.
This involves the submission of many different types of documents – from the employment certificate to the earnings certificate or regular receipts to our bank account. Even if we provide all the required documents and go through a long process of applying for a consolidation loan for those in debt, it is not at all certain whether we will get it.
However, we still have a chance for a debt consolidation loan, but not in a bank, but in a loan company. Non-bank institutions do not have such drastic requirements and many of them provide necessary assistance, even to those who do not have good credit standing.
In addition, loan companies do not pay so much attention to credit history, nor do they verify their clients in the debtors’ bases, which means that even a person with debt bailiffs can count on support.
Debt consolidation loan – what does it give us?
What will we gain if we decide on a debt consolidation loan? I must admit that quite a lot! First of all, one installment of the liability, not ten with different repayment dates. This installment will be compatible with our financial capabilities, so once and for all our financial problems will end, we will not have to look for free funds or resign from covering current needs to meet our obligations.
The consolidation loan is prepared in such a way as to help us, and not to burden it. In addition, it is worth remembering that since all existing obligations disappear, we will no longer have to watch over repayment dates. As a result, we can finally sleep peacefully and enjoy being straight.
It is also worth mentioning that a debt consolidation loan is a solution that anyone in need can use. The position, social status or political views do not matter. A consolidation loan can be taken both by people who face many obligations, as well as those who have only one problem, but how problematic. The consolidation loan very often has much more favorable conditions, so taking advantage of such an offer becomes profitable.
Taking a consolidation loan is also a step towards improving your situation. Customers who use such solutions are better received by other financial institutions, so they can regain their trust and count on future financial support.