December 7, 2019 | Uncategorized | No Comments
It is not uncommon to have a lot of smaller credits that cost a lot each month. This can for example be short at electronics companies, clothing stores, etc.
Other credit is smaller private loans etc. which can be taken as these also have high interest rates to be paid. A good option for those who have this is to try to collect these loans for a larger one that is cheaper.
Why you should collect the loans
We have already almost answered this question in the introduction when we talked about that it is a big cost that these smaller loans often carry. It is therefore possible to save a lot of money each month which is reason enough to try to collect the loans.
Furthermore, it is also much better when it comes to the overview of the economy as it gives to have all the loans pooled in one place. Instead of having a variety of smaller credits, it’s just a loan to keep track of.
A slightly more concrete example
Say you have four loans of USD 25,000, USD 20,000, USD 35,000 and USD 5,000. These all have fairly high interest rates, say between 15 and 20%. In total, you owe about USD 85,000. If you could instead get a single private loan of USD 85,000, and pay off all the other loans, where your interest rate is only 8%, that would mean a substantial interest rate cut. In addition, you would have to avoid notification fees and any other fees for the old expensive loans.
You would have a rather cheap loan instead of four expensive loans. You would lower your monthly cost a lot for your loans and even as I said have better overview since you only have to pay on a single loan. It is a good option for saving money.
What type of loan is suitable for those who want to collect the loans
It is important to get as cheap a loan as possible when you collect the loans and thus it is best to try to get a mortgage. But this requires that you have a home that is currently not fully mortgaged for it to be possible. Something that far from everyone has.
If you should, our tip is that you contact the lender where your mortgage is located and talk to them if it is possible to borrow more money on the house to settle the other debts.