A Loan for Consolidation Payday Loans, One Installment Instead of Many
The best solution for people with several financial obligations, struggling with the so-called doubled interest, and for those who have difficulty in paying off their loans and payday loans, a consolidation loan was created. See http://www.metroresearch.org/10-ways-to-consolidate-payday-loans for a write-up
Repay payday – how to do it?
Currently, more and more people are choosing to quickly raise money with short-term loans, also known as payday loans. Obtaining the money you need is simple – too much. More and more loan companies are encouraging to take petitions online, which does not require too many formalities, submitting documents from banks, certificates of earnings and other. It is not even necessary to be present at the office to sign a contract! In addition, ads obscure the actual conditions of cooperation, suggesting low installments and fast repayment time.
Unfortunately, as a result, it turns out that this is a solution that can quickly contribute to falling into the debt loop – one financial commitment is repaid with another loan and another, getting lost in the benefits accumulated in this way. Increasing debt, stress and frustration lead to more ill-conceived decisions. In order to get out of this spiral and restore the private finances, it is a good idea to use a product that is a consolidation loan.
What is consolidation about?
Consolidation in a few simple words consists in combining several loans into one, thus allowing to obtain one installment for repayment, with lower interest costs and extended repayment time. Thanks to this you get one loan for payday loans and other financial obligations. It gives you the chance to organize your finances and not let you fall into a spiral of debt. As a result, you receive one smaller commitment spread over convenient installments at the right time for you. The advantages of this type of solution are huge. The biggest advantages (in addition to the above) include :
- reducing the monthly cost of servicing a financial liability,
- one low monthly installment instead of many different,
- long repayment period,
- one repayment period instead of several different ones and matching it to your own needs,
- the possibility of receiving additional cash for another purpose,
- the opportunity to negotiate terms,
- the chance to combine all liabilities into one installment with an extended repayment period,
- Interest rates at an attractive level and lower interest rates for repayment of installments,
- initial decision to grant a loan within one hour.
Before taking out a consolidation loan to repay payday loans and other liabilities, you must consider the factors affecting its cost and repayment terms.
What should you remember?
The decision on consolidation should be well thought out as it constitutes another important financial commitment. Good insight into current financial liabilities is very important – you will need a thorough analysis of all expenses incurred on you to have a clear idea of what shape the repayment loans may take in the future.
Being late with the repayment of the consolidation loan (remembering that you have chosen the repayment date convenient for you) will cause unnecessary tension, and it is the loan for payday loans and repayments that supports the spiral of commitments and the ordering of your finances. Facilitation? In this case, it is worth to run a standing order in the bank, so you will not forget about repayment of the installment.
In addition, it will be very important that before signing the contract with the lender who provides a consolidation loan for the payment of payday loans, read carefully the additional arrangements and costs you incur. This includes interest rate, commission and total cost of loan service.
The condition that allows taking a consolidation loan to repay lending and loans is the creditworthiness and the presence of regular income. This increases your credibility in the eyes of the bank, which is to provide you with financial support and guarantees that the new, combined in one installment you will pay off in a timely manner at a convenient time.
You will quickly notice that the repayment of smaller installments turns out to be a much more convenient solution. In a short time you will regain control of finances and peace, thanks to which you will be able to focus on yourself and other, not increasing obligations.
APY – the total cost of the service
Considering taking a consolidation loan to repay payday loans or loans, pay special attention to its entire amount, taking into account the APR, ie the Real Annual Interest Rate. Its size includes: nominal interest, commission, margins and all additional fees indicated in the contract.
It must be remembered that APY is set individually for each client. When analyzing the application, the consultant checks what the borrower’s options are, what his income looks like, how many active debts he has, whether it repays in a timely manner, etc. Only then prepares a tailor-made offer for a specific customer.
To simplify and illustrate how much APY it can bring, banks have introduced so-called “Representative example”, taking into account all variables for the average person. As a result, you can more or less compare offers from different banks and choose the one that seems the most attractive. However, specific price conditions are only known when a positive decision is obtained. Therefore, when planning a consolidation loan, you should keep in mind how much the actual costs of such a commitment may be.
Looking through the available consolidation loans to pay off payday loans and other liabilities, it is easy to notice that almost all of them involve collecting a commission for their granting. The amount of the commission depends on the bank and is usually from a few to even several dozen percent. Sometimes, as part of the promotion (eg for creating an account), banks withdraw from collecting a commission. Before making a decision, it is worth taking a closer look at this point of the contract.
The interest rate is the second factor beside the commission, which affects the total cost of the credit for payday loans and loans. The interest rate consists of the bank’s margin (usually from 2% to 8.28%) and Jabank 3M, ie the interest rate on the interbank market (currently the rate is 1.72%). The bank determines the interest rate by analyzing the applicant’s options. Acting in accordance with a specific law, however, he can not set a rate exceeding four times the lombard rate, or 10% per annum.
The maximum amount
At present, on the Polish market, the maximum amount that a bank consolidation loan may have for the repayment of payday loans and other liabilities obtained on the basis of an exemption is PLN 300,000. zł. Higher amounts are only granted with additional collateral in the form of a mortgage.
Duration of the contract
Usually, this type of loan for payday loans and loans is granted for 9-12 years. However, it happens that a consolidation agreement is signed even for 30 years – for example with mortgage collateral.
What obligations can you consolidate?
Unlike cash, the consolidation loan is purposeful. This means that money can be used to repay specific obligations, such as:
- loan or cash, car or installment loan,
- the limit on the current account or on the card,
- other consumption obligations.
Some difficulties may arise when consolidating student and preferential loans – the bank may request additional documents when considering the application. It should also be added that consolidation of preferential liabilities is often unprofitable and – if it is not necessary – we do not recommend doing so.
Security used by banks
A consolidation loan can occur:
– without a mortgage – the bank does not require security, but the amount of support is lower (usually up to PLN 200,000), and the contract is signed for a shorter time (up to 144 months, ie for 12 years),
– mortgage – with collateral in the form of a mortgage; usually awarded for high amounts, and the contract is signed for
longer time. The procedure for obtaining it, however, is longer and more complicated.
Applying for a consolidation loan for repayment of payday loans and other liabilities, you must present:
- agreements regarding commitments you want to consolidate,
- bank statements from personal accounts,
- card statements (if you have them),
- a certificate of employment (eg contract of employment, task, contract of mandate, etc.),
- proof of income,
- statements on marital status.
These are only necessary documents – additional formalities are not necessary, and the possibility to submit only the most important documents makes it easier for you to decide on a consolidation loan for repayment of payday loans. An interesting solution is also the consolidation of online payday loans, which limits formalities and speeds up the entire process.
Do you feel overwhelmed by too much information? Take it on us – we’ll help you choose the best loan for your money and loans!
By using our assistance in choosing a consolidation loan to pay off your payday loans and loans, you get:
- guarantee of the best offer tailored to your needs,
- expert support,
- help in choosing a convenient solution for repayment of payday loans and loans,
- quick offer tailored to your financial requirements and possibilities,
- attractive interest rate, long repayment period and one low installment.
Do not hesitate! Contact us and check how much you can save!
If you want to learn more about what to do to spend a consolidation loan on payday loans, go here.