Problem paying back payday loans taken too hastily? Many borrowers experience this. Especially that for several payday loans, people usually do not have adequate creditworthiness. The accumulation of liabilities and fear of the consequences of non-repayment means that such borrowers are eager to reach for consolidation loans. This is usually a rescue from trouble, but you must remember that it is also another commitment that you have to pay back. Therefore, consolidation should also be approached with a head and common sense. Unfortunately, even in this case borrowers often do not avoid basic mistakes. What should you avoid?
Hurry is a bad adviser
Borrowers who have faced the surrender of a large amount of money in a short period of time often act in desperation and, understandably, under enormous time pressure. Panic and the desire to solve the problem as soon as possible are understandable, but nevertheless it is recommended to think carefully (i.e. not quickly!). Hurry will lead to choosing the first better offer, without thinking about what long-term effects it can bring. In most cases, unfortunately, this will not be the best and usually very expensive offer.
Naturally, the costs of a newly created liability cannot be avoided in the case of consolidation and usually these are not cheap loans, as consolidation is associated with a much higher risk of loan default than with other types of liabilities. In addition, when it comes to non-bank consolidation loans, the choices are quite limited, as the number of relevant offers is small.
One of the few consolidation loans on the Polish market is a loan from Mikasa, which offers a maximum of $ 16,000 (of which $ 12,800 can be used to pay liabilities) spread over 12 equal monthly installments.
Excluding banks from consolidation offers
Although the non-bank lending market has changed almost dramatically in recent years, still many banking institutions treat online loans as inferior financial products. For this reason, although the majority of banks offer consolidation loans, not all loans may be included in the liability. However, if you only spend some time searching, you can find a few exceptions to bank consolidation loans, which would also include payday loans. Alior Bank is one of those banks where you can consolidate non-bank loans, although it is probably not the only one.
However, it should be borne in mind that granting such a loan will be subject to the fulfillment of several specific conditions. The most important of these is creditworthiness, i.e. achieving a certain level of monthly, stable income throughout the loan period. In addition, the bank will carry out a detailed verification of the applicant in the BIK, BIG and KRD databases and it should be noted that even the smallest backlog is unacceptable. Thus, it can be seen that obtaining a consolidation loan may not be easy, although it is definitely worth submitting the application, both in the loan company and in the bank.
The lowest installment is not always the best
Struggling with financial problems is usually associated with the fact that the borrower wants to limit the household budget as much as possible and sometimes introduce radical cost cuts. This inclines commitments for the maximum available period. Of course, if the financial situation of the borrower is very bad, a low installment will be a necessity, but in other cases it is worth considering this decision. First of all - choosing the maximum repayment period is also the largest cost, and secondly - in this case, the borrower deprives himself of the possibility of changing the repayment schedule and extending the repayment period, in case his financial problems last longer than he expected at the beginning. It is better not to count on the lowest possible installment, but ideally match it to the amount of earnings and the real monthly amount that can be used to pay back the loan. In the case of consolidation, the sooner we pay the debt, the better.
Borrowing more than you have to pay back
The offer of both banks and loan companies usually has the option of "picking up cash". It consists in the fact that the lender grants a loan higher than the current obligations of the applicant. Part of this amount is transferred directly to previous lenders, and the excess is transferred to the client's account. Although at first glance such an offer is extremely attractive, it can lead to bigger problems. Extra money is usually spent quickly, and also deepens the debt and extends the repayment period. Although this money can be put aside for a "rainy day" and provide security in the event that the borrower's situation deteriorates significantly, but it is usually difficult to implement the planned plan and refrain from spending money.
You can always think of other solutions
You do not always have to decide on consolidation, and you should also think about other options, such as applying for an ordinary installment loan (if you have adequate creditworthiness) or taking advantage of the offer of social loans, e.g. at Astro Finance. Sometimes it will be more profitable, especially in the latter case. In addition, such loans will allow the liability to be spread over a longer period than in the case of consolidation, and this is important if the borrower's financial situation is really bad. However, any borrower's decision, whatever it may be, requires careful consideration and careful consideration.