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The Czechs are afraid to consolidate their loans because there will be too much paperwork, this, that, and so they just put it aside. Error. Debt consolidation can be quick, convenient and can save you fortune.
And now the myths and fears of consolidation most often associated:
1. Huge administration with execution
You may spend a little time with consolidating . The companies you are consolidating have to provide all documents on existing loans, document income and personal documents.
Compared to the regular administration you are dealing with with more loans, it is an investment that is worthwhile and worth the paperwork in just a few minutes. If you have multiple loans, on purpose, try to calculate how much time you spend on managing your loans per month and imagine that you only have one loan and one repayment term.
2. Processing takes a long time
Maybe 10 years ago. Today you can find all offers of banking and non-banking companies on the Internet and you can compare the conditions, interest rate and APR in minutes.
At Lady Brett Ashley, you can apply for consolidation by phone or by e-mail . Have only two identity documents, employment details and indicative information about the loans you want to consolidate.
You have to bear in mind that banks are cautious in consolidating and require clients to have any credit agreements, credit statements or outstanding balance statements. Often, there may be a requirement to provide proof of proper payment of the last few installments for loans that are included in the consolidation process.
3. Only bank loans may be consolidated
It is not so, it is possible to consolidate non-bank loan, leasing, overdraft, credit card or mortgage. Of course, the more products you use, the more complicated it will be to judge if consolidation will pay off at all . So always find out all the conditions first and calculate everything carefully.
4. When the monthly installment is reduced, the repayment period is extended
Everything is individual and for banks and well-proven non-banking companies you can usually set the repayment period and the amount of repayments according to your possibilities. Again, you must thoroughly read all the terms. And if you do not understand something, do not hesitate to ask for example via Facebook.
5. Early repayment = high fines
A non-bank loan and early repayment for a fine? That is now pasé . However, another situation may arise with mortgage loans, where there may be a risk of early repayment.
The amendment to the Consumer Credit Act clearly defines situations where institutions cannot impose a penalty for early repayment. However, it does not completely prohibit it. In addition, the amendment is effective from 1 December 2016, but if you have entered into a contract earlier , the new rules will apply to you when your existing interest rate fixation ends .
Find out which products you use are subject to a fine and which ones are not. Sometimes consolidation may pay off despite a fine because the terms of the new loan are more favorable.
6. There must be a hook
It’s like moving to a new mobile carrier that will offer you a better rate. The winners are on both sides. You get better terms for your loans and banks or non-banking companies get a new customer.
Consolidation is not always worthwhile, but if you set it up with the right company and calculate everything thoroughly and read the terms, you can save hundreds or thousands of crowns per month.