Month: August 2020

To replace credit with another credit

by Carla Lyons

If you have different loans at different institutions, you should consider whether a complete debt restructuring to only one bank is an advantage.

Keep track with just one loan

In the course of life it can happen that you have to take out various loans and make purchases on installments. If the repayments are planned for the long term, you have to pay off several monthly repayments at some point. It can quickly happen that you lose track of things or fall behind with payments if your life situation changes.

A simple solution is then to reschedule all of your outstanding loans to just one bank, i.e. replace the previous loan with credit. This gives you a better overview of the total debts that you still have and is only owed to one creditor.

Save money with debt restructuring

A particularly favorable offer, especially with regard to interest or repayment terms, can make rescheduling meaningful. So much money can be saved by lower interest rates. But it is also advantageous to set the monthly installments, which are adjusted to new living conditions, for example by a longer repayment period and therefore lower monthly installments than before.

When you redeem a loan with a loan, it is usually the case that the individual monthly installment is lower than the sum of the installments for many different creditors.

Conditions for loans

If you are considering the option of redeeming a loan with credit, you should inform yourself well beforehand. There are many different credit institutions with different terms. Definitely compare interest rates, term, fees and flexibility. Think about the future and whether you can meet your commitments by the end of a loan agreement. 
Check whether you meet the requirements for debt restructuring.

With reputable credit institutions you always have to provide proof of your liquidity, usually a confirmation is required that you are in permanent employment. The amount of net wages and other financial obligations must also be taken into account, after all, a credit institution needs the certainty that it will get borrowed money back.

Don't go lightly on a loan with particularly low interest rates. The overall package is crucial. Inquire at several banks and get advice from a specialist. Compare in peace until you are sure that you have received the right offer.