About loans consolidation

Loans consolidation

Loans consolidation (refinancing) means paying off old debts, such as consumer loans, with a new loan. Refinancing is useful if the total cost of a new loan is less than the total cost of old loans. The purpose of loan consolidation is to avoid unnecessary expenses in multiple locations by paying off the loan to only one lender. Loans consolidation gives you savings on loan costs, you save on interest rates, on billing fees, it’s easier to keep track of finances, you only pay one loan payment. For example, if you have small consumer loans worth hundreds of euros, by taking out one larger loan, you can save hundreds of euros a month on expenses such as interest and account maintenance fees.

What loans can be combined?

These are usually unsecured consumer and quick loans taken out to buy cars, boats, repairs, household appliances, or pay bills. For example, if you have accumulated credit card debt, and in addition to this, you have taken out a loan to buy household appliances, as well as made a down payment for furniture, and each account for these loans has different payment terms, you can apply for a refinance that will cover the remaining amount of all these debts. This way, you won’t have to pay back your debts at three different addresses, and it will be easier and cheaper if you only have one loan left to repay.

How to combine loans?

Check all your existing loans and find out their total cost. Calculate how much interest and other expenses are on each loan. After you determine the current situation with your debts, apply for refinancing from several lenders. You will receive customized loan offers based on your personal information and ability to pay. After that, compare the interest rates and monthly payments received from lenders with your current ones. Pay off the loan as soon as possible. When the loan repayment period is extended, interest costs increase. Then the cost of the loan may be higher than you expected. Therefore, carefully plan a realistic repayment period to correctly estimate the cost of the loan. You should plan your own finances so that you will definitely not need a new loan during the refinancing repayment period.