Can you create an objective ranking of consolidation loans? No. This is not possible because too many factors, apart from the general loan proposal, affect the credit offer we receive in the bank.
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Consolidation of liabilities is an effective way to reduce the budget burden resulting from the repayment of several loans or credits. A consolidation loan is also a smaller loan installment, which is achieved by extending the loan period (however, it increases the total cost of the loan) or through a lower interest rate. A consolidation loan is therefore only one loan, and thus only one (usually lower) installment. In addition, under the loan, you can get extra cash.
A subjective ranking of consolidation loans
Why is this ranking of consolidation loans not possible to be created? Everyone who creates such a credit ranking accepts certain general parameters.
It can be, for example, a consolidation loan for € 25,000, which is taken out for five years. An example of a borrower is single, he lives in a medium-sized city, employed on the basis of a contract of employment. His salary is approx. € 4,000 net (on hand). He does not receive additional income. He does not pay any additional obligations.
Then we send inquiries to a dozen banks, and these prepare a general proposal, trying to present the loan proposal as best as possible. And based on the information obtained, we create a ranking of consolidation loans.
But to how many people are looking for a loan, do the above parameters apply? It may turn out for anyone. But that’s nothing because you can write on the website that this is THE LATEST RANKING OF 2019 CONSOLIDATION CREDITS.
But it is not everything. Such a ranking can be determined in such a way that the bank, even with the least attractive loan offer, can be found on the No. 1 place. All you have to do is select the appropriate parameters… In this way, the so-called Sponsored rankings, and the reader has no idea about it…
The last thing to pay attention to, and which is not taken into account when creating such rankings, is the assessment of the client’s creditworthiness and creditworthiness. And such a scoring assessment has a decisive bearing on what credit offer the bank will present to us.
Comparison of consolidation loans
How to choose a cheap consolidation loan and create your own ranking of consolidation loans yourself?
When choosing a credit offer, we should pay attention to:
- What loans and loans are subject to consolidation in a given bank. Is mortgage consolidation possible?
- On the interest rate, commission and additional fees related to the loan.
- Possible additional benefits, eg: the possibility of taking advantage of credit holidays or additional funds as part of consolidation for any purpose, eg repayment of non-bank liabilities in loan companies.
- Loan repayment period – longer repayment period, less installment, but a more expensive loan (more interest on the loan to pay).
- How are the issues related to the repayment of the existing financial obligations implemented?
- Who covers (the customer or the bank) the costs of fees for early repayment of loans and advances submitted for consolidation (if such fees occur).
- Does the bank require the provision of collateral for the repayment of the consolidation loan?
The cheapest consolidation loans are not the lowest nominal interest rate but low APRC – annual real interest rate. The APRC represents the total cost of the loan in percentage terms per annum.
It is enough to compare just 2-3 credit offers, create your own credit ranking and choose a favorable consolidation loan.