Consolidation Loans May Be The Answer To Your Financial Problems

By Author: mary parker
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Add up all your family's monthly debts to banks or non-banking financial institutions, whether you are dealing with mortgages, personal unsecured or secured loans, credit cards, overdrafts and leasing and you have a lot to win: you can save time and money by a single monthly payment to a single lender, you get extra money, not to mention the fact that it is fairly easy. Consolidation loans consist of refinancing, rescheduling and consolidating various loans (possibly from several banks) in one file, namely one loan and one rate, and only one bank too.

Refinancing or consolidation loans involve applying for a new credit to pay an old credit or, if necessary, all loans and credit cards, while the possible remaining difference can be used for other purposes. There are a lot of brokers who offer people customized solutions, help them with the credit file preparation, support their application to the bank and guarantee this support up to the using of the loan. They advise you on how to negotiate with the bank in order to obtain the most profitable solution. All costs involved in consolidation may be included in the new loan.

When ...
... speaking about consolidation loans, one has to take into consideration the customer’s benefits, and these are: a much better interest rate, an extension of the repayment period (having an immediate effect of reduction of the monthly sum paid to the bank), the existence of only one payment per month, the opportunity to receive special offers and promotions from banks. Consolidating all debts owed to several banks into a single loan is recommended when the conditions are favourable to the client. However, if you don’t have a fixed income, this type of loan is not suitable for you.

Nevertheless, there are some obstacles to consolidation loans which have to be taken into consideration when thinking about applying for one – the lack of guarantees, a very frequently met problem, given the devaluation of real estate, may stand in the way of consolidation loans (as they can only be accessed by applicants who can bring real estate properties as a guarantee, situation in which we deal with secured loans). Another important obstacle may be the existence of different fees charged by the bank in the situation of in advance reimbursement of the previous loan. Even if the bank offers a solution to solve short-term financial problems, if you don’t manage the family budget properly, you end up right back where you started, basically in the impossibility of paying the monthly debt.

Usually banks take into consideration only clients who have proved to be good payers. Even so, there are situations when there is a real justification for delays in payments – a reduction of the salary, job loss, an unexpected event in the family, which can be proved by documents. In such cases, the cost of the secured loans is determined by analyzing the customer’s profile, the guarantees and the documents presented to explain the reasons for delays in payments.
If you want to pay less to banks and possibly make some extra money you have to consider the possibility of consolidation loans and not be afraid of secured loans.