What to do if you owe money to several banks at once?

Loan consolidation is a top-rated service today. How to choose the most suitable offer and what you should pay attention to, read our material.

According to statistics, today, almost every fourth Finn has loans. At the same time, most borrowers pay more than one debt. And each has its payment term, amount, bank, where you need to take the money. It is clear that this is not very convenient — and if there are more than two credits, it turns into a problem.

Today, many organizations offer to combine loans — to take a new loan under more favorable conditions, and pay only on it. When is it worth doing, and when is it not?

What are the advantages?

First, it is much more convenient to pay for a single loan. After closing all debts in other banks, you pay only to one bank. Secondly, you can significantly reduce loan payments. In the case of expensive unsecured loans, the amount may differ greatly. If we compare the rates of consumer loans and loans for “debt consolidation” secured by real estate, we can see that the rate for the latter is lower. Finally, banks are ready to lend for a long period – up to 20 years. This will significantly reduce the monthly payment and the burden on the family budget per month.

Third, the borrower has the opportunity to receive an amount greater than all the existing debts (up to 60% of the estimated value of the apartment). This money can be spent on large purchases, repairs. For example, you have four loans in the amount of $ 50,000, and the apartment is worth 180,000. Therefore, you have a chance to apply for 90,000. Once approved, decide to take all or part of the approved amount to pay off your debts.

Fourth, if you use, for example, part of the loan amount also for major repairs of housing (which should be spelled out in the contract and the repair costs are documented), then there is a chance to get a property tax deduction.

What’s the catch?

The borrower’s real estate secures the “Consolidation” loan at the usual “mortgage loan” rate. At the same time, the client himself continues to live in the apartment and remains “registered”. In this case, real estate works as an asset that allows you to maintain the consumer’s quality of life at the proper level. Accordingly, the client should evaluate the advantages of such a loan – the monthly payment is lower, but it is necessary to pay regularly.

What loans can be combined?

The most diverse: commodity, consumer, automotive, and others. Difficulties may arise with loans that you took out in foreign currency — not everyone undertakes to work with them.

How long will the new loan last?

If you apply for a loan secured by an apartment, you can get a loan for up to 20 years. After receiving such a loan, the borrower repays ahead of schedule for five to seven years.

What documents are needed?

You can apply for a loan pooling on the website of the selected bank. Often it is enough to specify only the name and contact details. There you will also be advised on the loan amount and payment. What if there were delays?

Each lender has its own rules for dealing with such clients. For example, at least three months must elapse from the closing date of an overdue payment.

Whether lainojen yhdistäminen is worth the effort, you need to determine individually. You can try to calculate this yourself using the online loan consolidation calculator. Still, it is better to ask an employee of the lender company about it – he will take into account all the nuances, which can be quite a lot.