Do you pay by credit card, have you taken out a loan for a new stove and have you now bought a phone in installments? Surely you know the regular trouble with monitoring all due dates and counting each crown. Perhaps consolidation could help you. Most banking and non-banking institutions offer this service, but each on its own terms. Before you study them, see if consolidation is right for you.
Payday loan consolidation offers just for you
Once you have more than two payday loans, you can consolidate your loans into one payment. The institution with which you are consolidating will pay for all existing debts and you only owe it. You agree on new conditions, which in many cases can be even more advantageous. The main advantages include:
- With better interest and getting rid of some fees, you can save thousands of crowns a year.
- You can combine loans, credit cards and overdrafts.
- You watch only one due date.
The biggest advantage is, of course, the amount you can save each month. Remember, however, that the less you pay each month, the longer the repayment period and the total cost of the loan.
Why doesn’t consolidation pay off to everyone?
The catch is that many lenders charge high penalties for early repayment. So if the consolidating institution pays for you, your new debt may be higher than the sum of the previous ones. Unfair providers also charge a number of fees and some non-banking institutions even hand over your consolidation to the bank. They only work as dear middlemen.
Therefore, before you decide to consolidate, calculate everything properly and have your offers prepared from proven institutions. These lenders almost always have a handy calculator to help you calculate.
Is consolidation appropriate for me?
The best answer to this question is a calculator. You can also use the calculators of specific institutions.
Generally, there are five rules:
- Consolidate only if it’s really convenient for you.
- Consolidate pays off when you want to pay off your loans faster. The repayments of the new loan will be higher, but the repayment period will be shorter and the whole loan will be cheaper.
- If you have difficulty meeting deadlines, consolidation is right for you. Instead of a few terms, only one will apply.
- Thanks to consolidation you save on fees. If you pay for bank transfers or money orders and you have more than two loans, merging under one will save you money. Although these are small amounts, if you pay 50 CZK a month, it is 600 CZK a year.
- Consolidate if you can’t save anything. A financial reserve of at least 3 monthly expenses is necessary for each household. If you have so much spending on loans that you can’t create a reserve, be sure to consider consolidation.
First of all, do not underestimate the choice of the institution with which you will consolidate. Merging credit is a great opportunity to make money, so don’t waste it!