Is loan consolidation good -Should I consolidate loans?

Should I consolidate loans?

consolidation of loans

Loan consolidation is the combination of several  loans, the aim being to reduce repayments, get better interest rates. It is possible to consolidate loans in

“Thanks to the refinancing of loans, the client can only repay one loan instead of several with more favorable conditions and, if necessary, increase the new loan,” explains Anna from NBSB Bank. “When linking multiple loans to a single client, they usually get better terms, a lower rate and an installment than if they were paying multiple older loans separately.

Moreover, if it has loans in one bank, it better manages its budget and has a simpler overview, ”adds Marta from Slank Bank. Therefore, it may be possible to save money on more favorable terms, and a smaller loan repayment compared to loans disbursed will help stabilize the family budget. However, if a refinancing loan does not offer more favorable parameters than your current loans, transferring loans from the bank to the bank is just a waste of time.

Benefits of consolidation

Benefits of consolidation

One of the benefits of consolidating loans is that the amount that the client will spend on his / her monthly loan to repay loans will change. In the case of a consolidation loan, monthly borrowing costs are usually reduced and some banks even allow the client to choose the installment amount. However, the amount of the installment depends on the resulting interest and maturity of the new loan. If the loan was not secured by property or real estate, refinancing is very easy.

Most of the time, a client’s identity card or original loan agreement is sufficient for the client, according to Cheska, most of the information can be obtained from the bank through queries to registers. If the client refinances the mortgage, in addition to the new contracts and the payment of the old debt it is also necessary to transfer the lien in the cadastre.

A new bank refinancing a loan may also require a new real estate appraisal, especially if the original is older than a few years. In the case of a mortgage, the bank will pay directly from the new loan liabilities in another bank, or the payment will be checked subsequently – depending on how it is contractually agreed. When refinancing consumer loans, the bank checks the obligations paid. However, it may ask the client to demonstrate that he has actually paid off the obligation.

Bank requirements


The Bank’s standard requirement is the issuance of loan disbursements under a loan agreement. “The client is obliged to repay the loans in the contract and the bank checks compliance with the obligation by requesting credit registers. We do not contact the client until we find out that he has not repaid the original loans after our loan, ”says Zuzana from UnliLoan Bank.