All you Need to Know about Private Loan Consolidation
Getting a loan can be quite helpful when you’re running short of cash. Problems arise when you realise that you can no longer afford to repay the costs of the loan comfortably. Fortunately there are options available to assist you.
Consider private loan consolidation.
What is private loan consolidation?
This is a single, new loan issued by the bank, which pays off all or some of your existing private loans. If approved, the bank will pay the old loans off on your behalf. The entire debt will be rolled into a single, new loan. This means that you will be have a new obligation to repay your consolidation loan to the bank, as opposed to having to repay multiple creditors.
Private loan consolidation is ideal for individuals with strong credit, who have large loan balances.
If you desire a lower monthly payment, this type of loan may be ideal for you. If you have loans from multiple loan providers and you still have strong credit, this solution may be quite helpful for you.
The rates you will be charged will be dependent on your credit history, your credit score and your debt to income ratio.
What are the benefits?
- You will be responsible for one payment monthly.
- Your monthly payments will be considerably lower.
- There are no penalties for early settlement.
- Your multiple creditors will be paid on time and your debts with them settled.
- Approval is dependent on your individual affordability.
It should be noted however, that opting for private loan consolidation generally results in a higher overall cost of the loan.
