Instant payday loan debt consolidation
Instant payday loan debt consolidation involves converting several monthly loan installments to a lower one.
In many banks proposing the discussed solution, we are able to obtain an interest rate lower by 1-3 percentage points, which is one of the factors allowing us to reduce monthly installments. Unfortunately, there is also the issue of the repayment period, which must be extended. Only by combining these factors will the bank be able to offer us a lower installment. Extending the repayment period affects the total cost of the loan. It is easy to notice that in this case the basic principle of lending works, ie the longer the loan period, the more we are forced to pay off more interest.
Unavoidable additional costs
A consolidation loan is a solution that can significantly reduce your home budget. However, it should be remembered that a consolidation loan is not a cheap solution and in the end we are forced to pay back a larger amount than the loan installments that we decided to consolidate. Despite the fact that banks, also in the case of consolidation loans, are almost fighting for a customer, we should remember that in the final settlement they always turn out to be a plus. For this to happen, they charge us with additional costs. It is no different in the case of consolidation loans. The bank may charge a commission for granting a new loan, which is usually up to 4%, although sometimes it is much higher. However, some banks may waive the commission if the customer uses their other services, such as a personal account.
To decide or not?
If we do not have problems with the repayment of our liabilities, and we only want to reduce the amount of the monthly installment, we should not decide to use a consolidation loan. It just won’t be profitable. However, if we have problems with repayment of loans, their consolidation may be a good solution. It is important to make all decisions regarding our finances after careful consideration and with due care.