I often encounter a situation in which the readers of my blog, after paying bills and loan installments, with a monthly salary, do not even break a penny in the wallet. If you are overwhelmed by the installments of your loans and monthly expenses you are on the right path to falling into the credit line. Most often, it results in the loss of the current level of life and many nerves.
Of course, it is best to not allow your liabilities to be equal or greater than your net earnings. If your loan commitments and necessary expenses are about 70-80% of your salary, you should think about reducing your loan installments as soon as possible. So how can you reduce the loan installment?
There are basically four ways to reduce your monthly credit obligations:
- Consolidation of loans,
- Shifting the repayment date of the loan installment,
- Extending the repayment period of cash loans,
- Taking out a new cash loan with a long repayment period for repayment of loans with a high installment.
A consolidation loan – one loan with a lower installment instead of many
An effective solution to the problem of over-indebtedness is to change many loans for one loan, with one lower installment. A consolidation loan is used for this purpose. You can find the ranking of consolidation loans on my blog. What’s more, you can count on the fact that my team will take care of obtaining such a loan free of charge, pre-assess whether you have a chance for such a loan, and if not, it will help you do it. It will also prepare your application to get the best out of banking scoring.
You can usually consolidate all bank loans with the exception of mortgages, which in 99% is not profitable to consolidate. Only a few banks consolidate payday loans, but if you do not have a lot of money in the general debt of non-bank loans, there should be no problems with them.
Many people find out about a consolidation loan when it is too late, ie when they already have arrears in repayment of loans, and their monthly liabilities absorb the whole income. In such a situation, these persons no longer have creditworthiness for the consolidation loan.
An exit from such a situation may be finding a co-borrower or a spunker who in case you should have your leg pay off the loan for you. Some banks, as a co-borrower, allow anyone, even non-relatives. It is important, however, that this person should have high, documented earnings and low monthly obligations. In a word – to make her creditworthiness as large as possible. Consolidation with the help of a gouge is a complicated operation, through which it is difficult to get past an ordinary person. Fortunately, the Shark team will help you get this loan from A to Z free of charge.
What if your credit situation is not bad at all, but would you like to lower loan installments and even their cost?
Here, of course, a typical consolidation loan may also be a solution. Rarely but, there are promotions thanks to which you can get a free loan. Currently, such promotion is offered by Citibank to new customers. By ordering a Simplicity credit card with consolidation, you can get up to € 10,000 in your bank account to pay off your other loan obligations.
A loan up to € 10,000 is free, i.e. you repay as much as you borrowed in 6, 9 or 12 monthly installments. There is also no monthly card fee, which I pointed out in the Simplicity card review. The requirement is not large – you must have documented earnings at least € 1200 net monthly for at least three months, and if you are an entrepreneur € 2,500 net for 2 years as an entrepreneur. Naturally, with the lowest earnings required, i.e. € 1200 / month, you can not count on a free consolidation loan in the maximum amount of € 10,000.
The basis is the possession of creditworthiness, also Simplicity credit card with consolidation ( online application here ) is a solution for people whose financial situation is not bad yet. If this solution seems to be perfect for you, you can read all the details of the promotion on this page.
Banks refuse a consolidation loan – what to do?
Obtaining a consolidation loan is not easy. Submitting queries at banks at random without proper preparation often brings a chance of getting such a loan to zero. I would like to remind you that all inquiries about the possibility of obtaining a loan from the bank land at Database. More than 3 inquiries at Database in a short time, ie about 3 months, usually result in a significant reduction in the chances of getting a loan or simply an automatic refusal to grant a loan.
In such a situation, you can save yourself with a non-bank installment loan, thanks to which you can pay your due time off. It is much easier to pay eg € 400 a month than € 3000 in one installment.
The repayment date of the loan installment
It happens that you will get pay from your employer a bit later or your client will not pay you on time. Then the problem arises because you are late with the repayment of loans, penalty interest is calculated. Maybe you did not pay attention to the loan repayment date while taking out the loan, and it falls on a few days before you receive your monthly salary.
If only the repayment date of the loan installment is a problem, you can ask the bank to postpone this date. The application is usually paid. The cost of the service starts from € 100-200.
How to change the loan repayment date?
You can move the repayment date of the loan installment in three ways.
- through the bank’s helpline,
- in a bank branch,
- in the online banking panel,
Often, it is not possible to change the repayment date on the helpline because banks protect themselves against demanding clients by requiring the signing of annexes to the loan agreement. Just verbal agreement on the hotline may not be enough.
Extending the repayment of a cash loan
If you do not owe payment of the loan installment, but you would like to lower the monthly liability, you can simply apply for extending the loan repayment date. Of course, just submitting an application for extending the loan repayment period does not mean that the bank will agree to it. You also have to take into account that the bank will charge a percentage commission for such an operation. What’s more, a longer loan repayment period will mean that you will pay more interest, which means that the total cost of the loan will increase.
Based on my experience, I can say that banks rarely agree to extend the repayment of a cash loan. You can apply for an extension of the repayment period at a bank branch, by mail or sometimes via online banking.
Quite often, I am approached by people who have incurred expensive loans from the APR over 23%. If you have a good history and creditworthiness, a consolidation loan may prove to be not only a panacea for high and many loan installments. In some cases, the consolidation loan can also reduce the total cost of the loan.
Taking out a new cash loan with a long repayment period for repayment of loans with a high installment
In order to incur a new cash loan you must have creditworthiness, which is often a problem for indebted people. However, such a solution for people who are more prudent and not in a frightful situation, is one of the simpler ways to prevent potential problems with repayment of loans.
Taking a cash loan at the bank to pay off, for example, payday loans is usually a very good decision, because you can convert expensive loans into one cheaper loan. There are free non-bank loans on the market, but usually the repayment period is short about 30 days. An additional problem is that the debt is repaid in one installment, which for people who have drawn a lot of such free loans may mean that they will be late with their repayment. Being late to repay such loans means that they have to pay for it as a paid loan. Delay in payment often means that within 7-14 days, the debt goes to the debt collector, which generates additional considerable costs.