Consolidation is not only a way to manage your repayments more conveniently, but above all to get out of debt and improve your financial position. However, this is not an ideal product that anyone can use. See the limitations of credit consolidation and who may have a problem getting it.
Looking for payday debt consolidation companies?
Payday loan consolidation is a special-purpose loan that can be used only to repay the payday loans that we have. Thanks to it, we can combine several payday loans into one. With the help of payday loan consolidation at https://citrusnorth.com/payday-loan-consolidation/, you can combine all these commitments and get one transparent installment that is easier to repay.
Consolidation loan – who will not use it?
Although consolidation may seem like a great idea to get out of debt, unfortunately not everyone will be able to use it. Conditions may be difficult for some people to prove and they will be an insurmountable barrier.
First of all, a person who applies for a consolidation loan must have adequate creditworthiness. People who have fallen into a spiral of debt and are insolvent have no chance of getting this type of loan from a traditional bank. So it’s good to start applying for it before you completely fall into debt. The best moment will be when we slowly feel that our budget is too small to pay back loans and keep, but we still have credit standing.
Excluded from the group of people who want to submit their commitments to consolidation may also be people who have both preferential loans and loans in private companies. Most banks do not allow combining banking and non-banking products.
If you do not have sufficient creditworthiness and your BIK rating is too low to get a bank loan, you can seek help from private loan companies. There, customers are not so thoroughly verified and it is much easier to get money there. In addition, such companies meet customer expectations and increasingly introduce the option of consolidating both banking and non-banking products into their offers.
What restrictions does credit consolidation have?
Credit amount and duration
The main consolidation problem is that banks advertise attractive offers that really few people can count on. To calculate how much money you will get and how long the loan period will be for you, the bank needs a lot of information that will be used for analysis. You will certainly be asked about your family, financial and professional situation. All this information is used to calculate your credit standing and offer best suited to your borrower profile.
Although you will need, for example, two hundred thousand zlotys, the bank may find that it is too much for you and will offer you only one hundred. The same is true with the loan time. Most often, banks lengthen it as much as possible, so that interest is higher and the total cost increases to the extent that the conclusion of the contract is more profitable for the bank than for the client. Each bank has its limits regarding the maximum amount of consolidation. And the traction offers that we see on television and the Internet is often just an incentive for potential customers to visit a given institution. As a consequence, we are offered something completely different that does not coincide with our requirements.
The price of consolidation
As we have mentioned, consolidation may be subject to interest, which will result in us paying more for a consolidation loan than for all our commitments combined. It is not surprising, however, because banks must earn something. Consolidation will almost always be more expensive than the sum of all liabilities. Instead, we have the option of extending the loan period to such an extent that the monthly installment is as low as possible. Before signing the contract, read it carefully and calculate the total cost of the loan, along with additional fees such as interest and commission. Although consolidation may be more expensive, sometimes it is the only solution that helps you get out of debt.