How to best consolidate payday loans?
Consolidation as a banking product has become something very common among indebted people. Thanks to consolidation, the client can combine several of his obligations into one, often with a lower installment. Consolidation of debts is most often needed when the sum of all customer installments exceeds its income. The indebted person works then only to pay installments without having enough to live for.
4 principles of correct consolidation
A client who would like to use the opportunity to consolidate his obligations should pay attention primarily to the four most important aspects of the consolidation loan, which are:
- The amount of installments and the period for which the client incurs a consolidation loan. A client who would like to consolidate his payday should choose the amount of loan installments in order to be able to repay him without any problems. However, the borrower should also remember that he can not decide on too low installments because then he will extend the loan period and thus will incur higher consolidation loan costs. It is best when the customer has appropriately selected installments to his financial situation, which at the same time are not too low to not excessively extend the period of consolidation loan.
- The right moment to try to consolidate payday loans. A person who is trying to consolidate should remember that any delay in repayment over 60 days is recorded in the BIK registers. Any such information often closes the customer the possibility of consolidation – banks “do not like” customers who have a delay in repaying installments. If the client wants to use the payday consolidation, he should do so before he has a delay in repaying the installments.
- The amount of credit for consolidation of payday loans. Very often, customers will receive a debt consolidation offer along with receiving additional cash for any purpose. However, such an offer causes the client to become even more in debt, which means that the bad financial situation is already worsening. It is best if the customer lends only as much as he really needs for consolidation.
- Consolidation of a payday loan by a loan or a loan. For a person who wants to consolidate their payday, the consolidation loan in the bank will come out the cheapest. However, not every bank wants to consolidate payday loans or other non-bank loans. In this case, the client may take advantage of the offer of consolidation of non-bank companies. Unfortunately, the APRC in non-bank institutions is twice as high as in the bank.
Consolidating payday loans by a person in debt can often be the only solution to get rid of debts safely. However, such a consolidation should lead the indebted person so as not to fall into even greater debt. For this purpose, it is worth using the help of professional credit advisers.