Although consolidation for most debtors is an effective solution to their concerns, it has some pitfalls. Everyone has to consider for themselves whether the combination of loans will pay off. What are the negative consequences of merging loans?
Banks report a dramatic increase in interest in merging loans. Repayment of liabilities by a new loan pulls the heel off the heels of people who have several loans and hardly tighten monthly installments. It does not matter if the debt comes from consumer credit, credit card or overdraft. In some cases, leasing can be repaid. By merging liabilities into one, in most cases, the monthly installments will be reduced and the maturity will be extended. This is related to the greater overpayment of original loans. In short, the security of smooth repayment is redeemed by higher financial burdens.
The loan consolidation calculator tells everyone whether it pays off. People who carry several commitments on their shoulders will usually be pleasantly surprised. The new loan can be adapted to current needs. In addition to reducing and extending the repayment term, it is possible to increase the loan.
The number of commitments, but their amount, is not usually limiting for consolidation. The maximum limit for a new loan to repay your existing loans ranges from six hundred thousand to one million crowns.
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Beware of sanctions
Loan consolidation can be expensive in some exceptional cases. Consolidation is not payable if the early repayment of the loan is sanctioned with an enormous amount. In the case of bank loans, this risk is minimal. The same cannot be said about all non-bank credit companies.
Danger lurks on borrowers who are already in trouble. Banks and solvent non-banking companies are checking their clients. Who has entered the debtors register has no chance of gaining consolidation. That is, if they do not point to companies with poor reputation that “help” everyone.
The word conclusion
Consolidation saves you a lot of trouble when balancing on the edge of a debt trap. But you have to assume that the distribution of installments over a longer period of time will cost you in total. You pay the bank up to tens of thousands of crowns more.