A consolidation loan is a loan that allows you to turn all your monthly liabilities towards banks into one lower installment – easier to repay, see the benefits of consolidation, and you’ll find them at BankNow. Thanks to the consolidation, we can pay off credit cards, overdraft and all other bank loans. Part of this loan can also be used for any purpose. Due to such possibilities, consolidation loans are becoming increasingly popular among Poles.
Several obligations one installment
We can easily define a consolidation loan as an earmarked loan that we can only use to repay existing loans. Before making a decision on a consolidation loan, we must thoroughly analyze all our liabilities and decide which of them may be included in consolidation, i.e. combining them into one larger debt. There is no obligation to combine all the debts we have. We should analyze them, among other things, in terms of debt repayment date because it is not worth consolidating a loan that we are already finishing paying back. Remember that we can combine cash, home, car, installment loans, and even overdraft and credit card limits.
Using a consolidation loan
The bank in quotation marks will quench our existing obligations at individual banks. However, it is not possible for the amount of the consolidation loan to be paid to us directly or transferred to our personal account. By using a combination of liabilities, the customer repays the debts owed to other financial institutions, servicing with one installment. Thanks to the possibility of extending the debt repayment period, the new installments may be definitely lower than the sum of the current charges. Unfortunately, however, we must be aware that a longer repayment period results in an increase in the total loan growth. For people who have problems with repayment of existing installments it is not important because the most important thing is that the new monthly installment will be lower and thus it will be easier for us to pay back the debt.
Despite the fact that the existing procedures related to incurring debts were subject to a thorough analysis of our creditworthiness, deciding to take a consolidation loan we will be covered by this procedure again. The bank will also ask the borrower to provide access to a number of documents, both those regarding incurring new debt, i.e. confirmation of identity, income and form of employment, as well as everything regarding our existing debt, i.e. all applicable loan agreements.