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What is a consolidation loan? Conditions for the consolidation of credit obligations What about a debt consolidation loan?

Many borrowers incur several financial liabilities at the same time. Suddenly, then, it turns out that they have to pay big capital and interest installments per month, plus fees for housing and living.

Therefore, it is worth considering consolidating your liabilities in such a situation. However, a bad history at BIK may ruin the plans to take a consolidation loan at the bank.

Request a credit consolidation loan 100% online today

A consolidation loan should be understood as a financial liability given by a bank in order to combine several other loans or loans via the Internet. The effect of this is the conversion of previous liabilities into one larger loan.

Customers often decide to take this step if it turns out that the sum of all principal and interest installments repaid monthly begins to exceed their financial capabilities or there is a real risk that the customer will not be able to pay their liabilities on time.

In such cases, it is definitely worth considering credit consolidation loan at, especially since you can negotiate more favorable loan repayment terms with the bank and take advantage of the option to extend the loan period and automatically reduce the amount repaid monthly as the principal and interest installment of the consolidation loan.

If a consolidation loan has a lower installment than the sum of the installments repaid to date, this is most often due to the extension of the period for repayment of the liability, which in turn increases the total cost of lending the client. He should be aware of this at the stage of deciding to use the consolidation option.

Conditions for the consolidation of credit obligations

credit consolidation

Each bank that offers a consolidation loan may set different conditions for its potential clients. In general, you can combine liabilities such as:

  • a cash loan,
  • car loan,
  • mortgage,
  • cash loan,
  • installment loan,
  • credit card,
  • consolidation loan.

Banks consider clients’ applications for consolidation loans individually. It is worth checking whether the bank in which we want to apply for consolidation has restrictions on the types of liabilities that can be consolidated.

Another condition for consolidation is that the customer has sufficient creditworthiness. It is recalculated, excluding existing loans to be consolidated.

In addition, banks control the situation of their potential borrower in the Credit Information Bureau. Negative entries in BIK will cause that the bank will not want to take the risk and grant a new loan to an unreliable debtor who in the past was late in paying off his principal and interest installments.

What about a debt consolidation loan?

In general, banks do not grant consolidation loans to people with bad histories at BIK. However, in this case, consolidation can be a way to get out of debt. You will have to get it in a non-bank company that is not required to control BIK before granting a consolidation loan.

Such a loan will allow settling debts, which will interrupt the process of charging penalty interest for outstanding loans. It should be expected that the consolidation loan will be more expensive than the consolidation loan granted by the bank. However, it can be very useful thanks to the repayment of debts with individual banks.

When applying for a consolidation loan, the loan company will ask the customer to provide documents regarding previously drawn loans and borrowings to be included in the consolidation. If she decides that such action on her part is not too risky, she will grant a consolidation loan to the client.