A consolidation loan ranking of 2019 banks. Review of consolidation loan proposals. Consolidation of loans is very important at the moment when the first difficulties in settling installments appear or we expect them to occur in the future.
Above all, one should answer the question: what is a consolidation loan? In short, you can write that it is a conversion of several bank debts into one loan.
Consolidation covers various obligations, not only cash loans and loans but also debts arising from credit cards held, limits in bank accounts, as well as home, car and even other consolidation loans.
Can I still consolidate payday advances ? Absolutely
The consolidation of payday loans via Push button for help enables primarily:
- A combination of several payday loans into one loan.
- Repaying only one loan with one, usually LOWER installment, than the sum of installments paid before consolidation.
- The possibility of obtaining additional cash under such a loan, for any purpose.
The consolidation is used primarily to improve creditworthiness and regain financial liquidity. The goal of consolidation is not to reduce the total credit cost.
List of banks consolidation loan ranking 2019
Is it possible to create the best ranking of consolidation loans? No. It is not possible. There are several factors that affect the credit offer offered to the client.
What is the creation of such rankings? We accept certain assumptions:
- consolidation loan € 30000 for 6 years,
- marriage with two children,
- total net income of € 5,000,
- contract of employment,
- own flat,
- no credit obligations.
And we send inquiries to selected banks. Based on the information received, we create the so-called Consolidation loan Ranking 2019. How many people refer to the above assumptions? It may turn out to anyone. What’s more, you can set the assumptions that the selected bank will be in the first place …
No so-called consolidation loan ranking 2019 does not include all factors that affect the offer that the bank will present to us. And yet there are two types of consolidation loans: cash and mortgage.
Consolidation loan cash comparison
Only a comparison of consolidation loans will allow you to create a credit ranking. It is necessary to take into account several factors that affect the cost of such a loan.
In addition to the comparison of consolidation loans taking into account the parameters of the loan, it is necessary to pay attention to the installment system. The cost of the loan also depends on their choice.
In the case of equal installments (fixed installments), the amount of principal and interest is changed on a monthly basis. Both parts are calculated in such a way that the installment is the same every month.
Capital – the borrowed amount
Interest – depends on the nominal interest rate on the loan and paid to the bank for borrowed money.
In the case of equal installments at the beginning of the crediting period, interest is paid primarily, not capital. Thus, the percentage in the initial installments is the most, and their amount decreases with subsequent installments.
Nevertheless, the most popular variant of the repayment of the consolidation loan are equal installments, because it affects the creditworthiness to the smallest extent.
Whereas decreasing installments mean higher charges in the initial repayment period, however, this is a cheaper solution than equal installments – thus the cost of such a loan is smaller. Decreasing installments are also more beneficial for those who plan to repay the loan ahead of time.
Consolidation loan and creditworthiness
Before granting a consolidation loan, the bank is required to examine the customer’s creditworthiness to check whether he will be able to pay the installments. It is nothing else than the so-called creditworthiness analysis. It includes, among other things, an audit of earnings and fixed expenses.
But that’s not all, because the bank checks the credit history at Database. On this basis, it determines whether it has a positive credit history allowing it to take another loan.
Do you know that if the total amount to repay the loan is not high, but the monthly installment is high, it may happen that a new loan will not be possible. A solution to the problem may be loan consolidation. The new loan agreement will combine the debt and the amount we need. The new loan is not taken during credit analysis because it will be repaid immediately after the conclusion of the new contract.
It should be taken into account that the assessment of the ability and reliability affects the credit offer that the bank will prepare for us. And no Consolidation Loan Ranking 2019 does not (as it can not) take this into account.
One smaller loan installment
The amount of consolidated loans and credits is spread over a longer repayment period, which means that the new installment is definitely lower than the sum of installments before consolidation.
A consolidation loan allows you to consolidate debts resulting from, for example, credit cards, installments for a washing machine, car loans, ROR account limit. A few loan installments are a risk that we will forget to pay installments, and that is already threatening to deteriorate our creditworthiness.
And what does this mean in the long run? In assessing the client’s creditworthiness, the bank may assess that the client carries more credit risk and thus may offer worse credit conditions or, in the worst case, refuse to grant them.
The most frequently chosen consolidation loan is a cash consolidation loan, which usually does not require additional collateral. Another type of loan is a consolidation loan secured by a mortgage.
The mortgage limits the risk borne by the bank and therefore allows you to offer better credit terms. In addition, the mortgage consolidation loan is granted for a much longer loan period. In the case of cash consolidation loans, the maximum loan period is 10 years, and in the case of mortgage consolidation, it is even 25 years.
What to look for before consolidating loans?
Of course the most important is the total cost of the consolidation loan. When comparing several loans, looking for cheaper consolidation, we should pay attention to its cost and APY of the loan.
Before you decide to consolidate, you need to check how much total capital has to be paid out, taking into account all the loans and loans you want to consolidate. Then count how much interest remains to be paid.
The necessary information can be found in the repayment schedule in the section with the credit balance calculated at each subsequent installment.
In the above calculations, the commissions paid, the percentage of other fees should no longer be taken into account.
The calculated total of the percentage of liabilities remaining to be consolidated should be compared in relation to the total repayment costs proposed in the consolidation loan (interest, commission, additional costs).
If the costs prove to be lower, we will save on a given consolidation. It should only be repeated that the main assumption of consolidation is:
- “Combination” of liabilities into one loan,
- paying one credit installment in one bank,
- lowering the loan installment,
- increasing creditworthiness,
- recovering financial liquidity by extending the loan period.
A consolidation loan is not the same as a refinancing loan
Very often, we incorrectly identify a consolidation loan with a refinancing loan (or with a refinanced loan). There are, however, some important differences between the two loans.
A consolidation loan is a “combination” of several credit obligations into one loan, and refinancing is the repayment of one loan with a second loan, often taken in another bank. The refinanced loan agreement does not allow the combination of several bank loans and loans. In the case of refinancing, it is also not possible to apply for additional money.