If you have several loans, you can consider merging them. But what should you pay attention to?
Those who have multiple loans sometimes feel that they are in danger of losing control of the monthly repayments. That is why various lenders offer you the option of merging loans. Although that list is rather limited in our country. Nevertheless, in times of low-interest rates it remains interesting to compare. By combining the loans, you can also obtain a lower annual percentage rate (APR).
The biggest advantage of merging loans is that you only have to pay the monthly installments to one party. Although the lenders do not go crazy overnight when you submit such an application. For example, the analysis to determine how much debt you have. Furthermore, you can check whether you are on a blacklist. In that case,may refuse to merge your loans, or you may set a higher rate. They can request this information from the National Lugalbanda of Belgium.
Make an overview yourself
Incidentally, it is advisable to make an overview of your current loans yourself. That way you know exactly how much you pay for which loan. After it has made an analysis of your situation, you will receive a proposal based on your repayment capacity. The higher your income, the higher your repayment capacity.
They usually come with a lower rate because the duration is extended and the type of credit changes. On the other hand, you have longer financial obligations to the lender. In addition, you usually receive a fixed interest rate. As long as you pay off your loan, you will not be faced with unpleasant surprises. Bear in mind that the rate may rise.
Those who regroup for loans of 5,000 USD receive a rate of 5.25 percent. If that amount rises to 50,000 USD, the interest may arise.
Note the costs
Moreover, do not forget that there is a price tag attached to every regrouping. The reinvestment fee is one of them. Although those costs are usually included in the annual percentage rate. If you have any doubts, be well informed.
Also always check whether it is interesting to regroup loans. This is not the case, for example, if you want to merge one (light) consumer loan with a car loan. The rates on a car loan are much lower than those on consumer credit. If you merge those two loans, the chances are that the price tag will increase.
Also, map out the potential future costs. If you have to take out another loan in the near future, for example, to buy a new car, this can take a big bite out of your budget in combination with a longer term of your regrouped loans. And don’t forget: borrowing money costs money.