When making decisions related to our finances, we should carefully analyze the home budget and be guided by reason. Sometimes, however, this may not be enough. We are not able to predict some of the situations. What do you do when you do not have the resources to pay your debt?
In many cases, consolidating the loan will be a good solution. How it’s working? Let’s see!
Regardless of the amount, each loan carries a number of serious consequences. The basic one is commitment to timely repayment. Therefore, the acceptance of the application requires the lender to analyze our financial situation and credit history. It happens that for reasons unknown to us, we encounter the rejection of the application.
However, responsible lending lies at the heart of the lenders’ decisions. It applies not only to the borrower, but also to the creditor.
If there are financial problems in the budget unexpectedly, often the only thing we think about is finding a solution quickly. As a result, we forget to check whether we are sure that we are able to meet our obligations under the signed contract.
At such moments, the responsibility falls on the loan company, which also in the interests of the client analyzes its finances, and then decides whether incurring a loan does not involve too much risk. However, there are situations when, despite good prospects, repayment does not go our way. How to get out of trouble?
Consolidating the loan
In the face of financial problems, the most important thing is to keep common sense and try to find the right solution. Most people, when choosing a lender, do not pay attention to the consequences of untimely repayment or assistance offered by a given company in such situations.
We are convinced that these records do not apply to us. However, it is worth being aware of the available solutions and the possibility of receiving help. One of them may be loan consolidation. This service appeared relatively recently, so you should read its principles.
consolidating consists in launching appropriate procedures at the request of the borrower, the effect of which will be to provide financial assistance in the form of a loan by one of the companies cooperating with our creditor. It is worth remembering that the new commitment will be exactly the same amount as the previous one. However, when it comes to costs related to the service, you should expect to pay commissions.
To avoid cash flow liquidity problems between the institutions and the client, the money will be transferred directly to the account of the first lender. What are the consequences for us after using this solution?
How to apply for loan consolidation?
The loan consolidating service requires you to face repayment problems. It will be necessary not only to acknowledge the impossibility of meeting the obligations on time, but also to contact the lender. For many people, it can be a challenge.
Still, it’s better to get through the formalities required than to wait and see how our debt grows over time. Most companies require you to be willing to refinance the loan before the end of the loan period. The appropriate instruction should be submitted by completing the appropriate form in the customer’s panel or by calling the Customer Service Office number. The final form is governed by the internal arrangements of the lender.
Most non-bank companies providing this service do not require their clients to find a loan consolidation . Instead, we must give the lender permission to act on our behalf. This will allow us to save time and reduce the required formalities. However, it should be remembered that regardless of whether we look after the consolidating institution ourselves or the lender, using the service involves additional costs.
They depend on the price list set individually by the company and the amount and period of crediting the active liability. Normally, the payment of relevant fees will be required before the loan consolidation is implemented.
The repayment of the loan consolidation
The loan consolidating procedure may seem complicated for many people. However, in essence, it is one of the simplest solutions to problems with timely repayment of liabilities. After going through the whole process, the question is often asked who should be given the borrowed money. When we decide to take this step, we must be aware that the place of the first lender is replaced by a new creditor.
The former contract is terminated when the loan consolidation is booked and from that moment we are subject to the rules in force in the company that repaid our debt. The repayment terms of the new loan differ only slightly from those applicable to the first commitment.
As mentioned above, the amount of such financial support is equal to the previous value. For example, if we borrowed PLN 1000 in A, and then we reported the need to refinance, then company B offers us the opportunity to get help in the same amount. After completing all formalities, this amount will be transferred directly to the account of the first lender, and we will remain obliged to repay the debt in company B.
However, it should be remembered that the new lender, in addition to a refund of PLN 1000, will also require us to pay for the service, i.e. commission and interest. Detailed information on costs can be found in the contract or on the company’s website. The loan period may remain unchanged. It happens that lenders offer longer time to pay off the obligation. However, it is important to remember about the cost increase associated with such a decision.