Have you fallen into the debt trap? Maybe you have a lot of outstanding credits in the form of unsecured loans and other payday loans? Do you repay each month on items you bought in installments? Today we go through how you can save money by merging your loans!
Lower the interest rate by merging your debt
Let’s say that through less wise decisions you are sitting with a handful of different loans. Some are small, some are large. You may have up to ten to twenty different credits. What can you do? Time does not work to your advantage when you are a borrower, the interest rate is an expensive cost.
Borrowing money to save money – that sounds crazy. But it’s actually the right way forward! You need a group loan, ie a larger loan that you use to pay off all your other loans with. The reason is that small loans have a far too high interest rate. It is also much better to have only one loan than say ten loans. It improves your credit rating so that you can apply for a new loan in a year and replace the old group loan – and thus go down even more in interest rates, in the long run. Read more about refinancing your loans at Gjeldsproblemer.com.
Get a better credit rating
What do we do if we draw blank from the banks about our application to collect loans? Or was the interest rate on the group loan we were offered too high? This is probably because our credit rating was too poor, and it can have many causes. Among other things, form of employment, housing, current loans but also credit information and payment remarks come into play. You may try to improve your credit rating in any appropriate way.
Get rid of the most expensive small loans
Lenders are good at squeezing in different fees; Fee for paper invoice, delay fees, fees for the sun rising even this morning. All these fees contribute to the effective interest rate being high, especially on loans with a low loan amount. Sort your credits in an appropriate order and do your best to pay them off as soon as possible, in the “correct order”. The right order is thus, without knowing much about your specific loan portfolio, probably the smallest loans first! This way you will fast get out of the deadly Debt Trap!