Deploying your debts is a reasonable solution for people who are unable to pay all debts in a timely manner. So how do you decide on a cash or mortgage consolidation loan and what conditions must be met to get a positive credit decision?
Cash or mortgage consolidation loan – what is worth knowing?
Credit consolidation is a reliable help when the conditions of our current debt cease to be favorable for us. This may be due to the deterioration of the financial situation or reduced interest rates compared to the period when we took out the loan. For people who have fallen into a spiral of debt, a cash or mortgage consolidation loan is a great help. Combines all debts into one liability with a lower interest rate, with a reduced installment and one payment date. Reducing the amount of the monthly installment results in extending the loan period, and thus increasing the total costs of servicing the loan. Before we decide on a consolidation loan, the whole procedure will be preceded by a creditworthiness analysis – a positive credit decision means that the liabilities transferred to another bank can be repaid.
Mortgage or cash consolidation loan – what to choose?
We divide consolidation loans into two categories – cash and mortgage. The cash consolidation loan has a low interest rate as in the case of other cash liabilities. However, the loan period is getting longer. In addition, the consolidation cash loan is not charged with an overpayment or early repayment fee. It has no real estate collateral and the repayment period can be extended to a maximum of 144 months.
A consolidated mortgage loan also has a low interest rate. This is associated with a high price for total costs, which are unavoidable with approximately 30 years of liabilities additionally secured by the property. In addition, with a mortgage consolidation loan, it is worth remembering a possible early repayment commission that applies during the first years of lending. You should also add other costs related to starting the consolidation – a fee for the valuation of the property, for re-entering the mortgage in the land and mortgage register, and a commission that the bank may charge when starting a new loan. Regardless of whether you decide on a cash or mortgage consolidation loan, it is good to get familiar with the current financial situation in advance and use e.g. the creditworthiness calculator.
A positive credit decision and a favorable solution
Loan consolidation is an ideal solution especially for people who know that in the near future they will not be able to cope with regular repayment of all their liabilities. The procedure is not complicated – the most important is a positive credit decision , thanks to which we will be able to spread the repayment over a longer period and on more favorable terms. Therefore, it is worth analyzing your financial situation in advance and focusing on the solutions offered by a cash or mortgage consolidation loan .