A PLN 30 thousand consolidation loan that we can use to consolidate bank debt.
A consolidation loan is, of course, the consolidation of only bank debt. It effectively allows you to reduce your loan installment. Instead of a few installments, we only have one and it is usually less than the sum of installments that we have paid so far.
Consolidating debt involves transferring all “old loans” to one bank, ie the bank pays our liabilities with our new loan. The distribution of repayments for a longer period allows for a significant reduction of the loan installment.
The consolidation loan allows repayment of cash loans, installment loans, mortgage loans, and car loans. As well as debts on credit cards or in ROR accounts. The bank will not pay off non-bank loans, but it is possible to settle them with additional cash, which we can receive as part of a consolidation loan. It is a new loan that is automatically consolidated.
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The consolidation loan of PLN 30000, regardless of the loan period, is a large consolidation, which is why it is very important to choose the best loan. Certainly, the consolidation and extension of the repayment period allow you to reduce loan installments. With such a high consolidation, we can use virtually only a cash consolidation loan. If the consolidation was much higher and also related to a mortgage loan, then we are dealing with a mortgage consolidation loan.
However, in the case of mortgage consolidation, the loan is secured by real estate mortgage. In addition, such a loan is lower interest-bearing. If we decide on a cash consolidation loan, no additional collateral is usually required. However, it will depend on our creditworthiness.
However, let’s not forget about the cons of consolidation. It is not only a smaller loan installment and a significant relief of the household budget (the installment may be lower by as much as 20-30% from the sum of the previous ones), but it also means higher credit costs. Because we pay off the loan longer, the total interest on the loan will be higher. In addition, as with a loan, we will certainly pay a loan commitment and perhaps other costs.