Combining loans is worthwhile if you have more than one loan in the background and pay more for each one separately than if you were to pay off only one loan.
Payment terms vary by loan provider and can usually be negotiated if you wish. This way you only have to pay off one loan instead of many. This will make it easier to take care of paying the invoice, as you only need to remember one due date.
We listed the fastest payday loan consolidation
So-called payday loan consolidation is offered, for example, by https://dedebt.com/payday-loans/payday-loan-consolidation/. This is the best payday loan consolidation.
It is typical for an indebted person to have several bills to be paid at the same time: there may be more than one credit card bill or another loan has been taken out to pay off the loan. Multiple invoices can also be overlooked and some invoices may not be paid when due dates or amounts are mixed up. In such a case, combining loans quickly can be a good option.
Combining loans does not mean increasing the loan amount
Combining loans quickly is a viable option if the cost of your new loan is lower than the total cost of your old one: you can pay off your high-interest loans with a cheaper loan all at once.
This will make your loans cheaper, pay less and save. Thus, the purpose of loan consolidation is to reduce the final cost of your loans by several hundred euros. By comparing loans, you will find the best possible rate for your loan.
Thus, the purpose is by no means to increase the loan amount that already exists. This can easily lead to even worse indebtedness and therefore you need to be extremely cautious about combining loans and carefully consider a payment plan. Generally, it would be good not to have multiple loans open at the same time. The best consolidation loan therefore calculates the total cost of the loan compared to the previous situation. Many have good experience with a compounding loan that lowers costs.
How Does Loan Consolidation Work?
The consolidation loan is designed to help you in situations where there is more than one loan and there are problems with meeting your payment schedule. For example, if you have a credit card bill, instant credit, and car finance payable and each bill has a different due date, it may be easier to combine loans. However, the intention is not to extend or defer the payment deadline with a new loan. Pay your loan as quickly as possible.
The interest cost will increase if the loan repayment period is extended. Then the cost of the loan may be higher than you expected. So, plan a realistic repayment time for your loan so you can estimate the cost of the loan correctly. For example, combining loans with a student may be a problem with a student loan. However, it is not usually granted a sufficiently large amount at one time.
By combining loans you can easily save up to hundreds of euros
Combining loans into a larger loan is just like any other loan or consumer loan. Here’s an example of how much you can save by combining multiple loans:
Example: 4 open loans, 2 credit card bills (€ 800 and € 1,200) and 2 consumer loans (€ 3,000 and € 2,000). Loans open for a total of 7000 €.
- K-plus Mastercard, € 800, 9.50% interest, 12 months, monthly payment € 75.15 and total cost € 901.76
- Stockmann Mastercard, € 1,200, 10% interest, 12 months, monthly payment € 109 and total cost € 1307.99
- Consumer Credit Credit, € 3,000, 16.46% interest, 24 months, monthly payment € 159.41 and total cost € 3,807.95
- Consumer credit Santander, € 2000, 12.7% interest rate, 24 months, monthly payment € 109.01 and € 2616.25
Total € 8633.95
Combined loan, different options:
- Komplett Bank loan € 7000, 4.99% interest rate, 24 months, monthly payment € 316.03 and total cost € 7 584.64. Difference: € 1049.31 cheaper.
- Bank Norwegian loan € 7000, interest rate 22.49%, 18 months, monthly payment € 472.04 and total cost € 8496.77. Difference: € 137.18 cheaper.
- Consumer credit Bigbank, € 7,000, 8.90% interest, 24 months, monthly payment € 159.41 and total cost € 8066.33. Difference: 567.62 € cheaper.
- Consumer credit Santander, € 7,000, 7.5% interest, 24 months, monthly installment € 336.10 and total cost € 8,070.11. Difference: € 563.84 cheaper.
The above open loans would be worth paying off immediately with a new € 7,000 consumer credit. By choosing the most economical example, you can combine loans and save nearly $ 1,050, and in the worst-case scenario, you could save over $ 137.
The sooner you can pay off your loan, the less you will have to pay interest costs. However, you must first determine the terms of your loan with the lender, as the loan period offered varies. It is a good idea to arrange the fastest possible payment plan for your loans.
The example shows the nominal interest rate of the loan. Note, however, that the loan rate is not the only cost of the loan. Loans often include opening fees or other loan costs that increase the cost of the loan. Therefore, it is not worth comparing the interest rate alone, but the total cost of the loan.