Good morning! A consolidation loan, as the name implies, is incurred when we are not making repayment of current liabilities. The question is, is consolidation really profitable? Is it by chance, however, not a form of additional burden and the name is misleading?

Consolidation loan


The profitability of a consolidation loan is relative and it should not be fully considered in such categories. The function of a consolidation loan is to get out of the spiral of debts, not to get into a situation in which we stop paying off and bring a lot of problems related to it.

Consolidation must, therefore, be treated as a last resort.  As a colleague wrote above – when assessing a consolidation loan in absolute costs, it will be less favorable. You will simply have to pay more for it compared to your current obligations.

Reduces monthly installments

Extending the repayment deadline by two times, which reduces monthly installments, is invaluable, especially in crisis situations. Let those who are looking for a consolidation loan check their offer in Wonga. At the same time, this is no advertisement – they simply have a loan of USD 20,000 for 60 months, after which the monthly installment is just over USD 500.

The only question is whether it can be treated as a consolidation loan? I have started consolidation twice in the last 10 years, so I can comment on this topic, because I have some experience in this field need My advice: look for the best solution. The search usually does not take more than 2 hours, and in this way, you can save a lot of money – amounts of up to 1,000 USD, on a full loan scale.

Excessive monthly obligations


Consolidation should not be much more expensive than existing loans (well, unless the existing ones are on extremely unfavorable conditions). If you have a question, ask: I’ll be happy to answer? In financial terms, it is rarely profitable, but in terms of reducing financial tension, freeing yourself from excessive monthly obligations – this is the most advantageous option.

Take care of your credit history, because all these financial institutions have a preview of your credit history. No one will lend money blindly, to someone who has problems with credibility, to someone who does not pay their debts.  When debt collection or debt enforcement proceedings are initiated, few people think about costs, only how to mitigate the effects.

I agree that nothing at all costs, but even when consolidation is not very profitable, it is still a better option, definitely a better option than bailiff seizure, because then we are also burdened with various additional costs.

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