A consolidation loan without a mortgage – learn about its pros and cons
Generally speaking, it is a combination of many liabilities into one, thus the synergy of many monthly installments into one. With the consolidation loan, we can repay cash loans, but also installment loans, credit cards or revolving personal limits.
This allows you to properly manage your budget and if we take out this loan at the right time, in the event of financial problems, we will avoid increasing debts in repayment of installments. It often happens that our liabilities are so high that their consolidation requires establishing collateral, e.g. on our property.
Loan consolidation allows you to better organize your expenses and simplifies the timely repayment of installments. You no longer need to remember several installments and several payment periods. What’s more, thanks to consolidating our debts, we usually get a lower installment.
Is a mortgage loan possible for those in debt without a mortgage?
Answering the question right away – yes, it is possible. A consolidation loan is often the only way not to fall into a debt spiral and go straight. Especially if the amounts of the liabilities are not high, and we ourselves have adequate creditworthiness.
Just like any other commitment. Banks are also not in favor of establishing collateral whenever possible, because subsequent possible enforcement of real estate is expensive and long-lasting for the bank. In addition, for a person who has long-term repayments and installments are not paid, it is practically impossible to get a bank loan.
It doesn’t matter if it’s a real estate loan or an unsecured consolidation loan. Loan collateral is required for really high loan amounts or other consolidation commitments.
Sometimes the customer himself prefers such a loan because of the pledge they are cheaper than other offers available on the market. Therefore, more attractive pricing conditions can be obtained, but with long-term awareness that the real price is the value of the property.
A consolidation loan without a mortgage is more easily available
Of course, it is easier to receive. First, you don’t need to own the property. This is a key factor that many borrowers fall out of at the start. In addition, this property cannot be encumbered with other loans, preferably as if it did not belong to several people, because otherwise, it is difficult to take it as collateral.
Moreover, it must be attractive to the bank as collateral. The consolidation of loans at the bank always requires checking the borrower’s data in registers such as financial standing.
Is the consolidation of loans without financial standing and mortgage possible? If so, then outside banking companies. Banks always check their registers to avoid unreliable payers.
It is also worth taking care of your credit history if you are interested in a bank loan. A guide for customers with a bad credit history may be an indispensable tip. In addition, the difference between non-bank companies and banks is definitely the price. In banks, the upper-interest rate and maximum non-interest loan costs are regulated by law, they are also cheaper than in loan companies.
How to find a cheap consolidation loan?
It is worth knowing that consolidation without a mortgage is more expensive than a loan with mortgage security. The bank then has an ace up its sleeve and thus reduces the risk of customer insolvency.
Other loans usually have standard interest rates and commissions. You will get a cheap consolidation loan without a mortgage in every bank, but also in other loan companies.
The procedure for granting such an obligation differs from a cash loan in that you have to submit loan agreements that you repay. Other documentation and analysis process is the same as for taking other credit products.
Remember to pay attention to the APRC. That is the actual annual interest rate. It already includes all the costs that we must bear, i.e. nominal interest, commissions, insurance, and other fees.
The smaller the APRC, the lower the loan price. It’s always a good idea to use a loan comparison tool to find a cheap consolidation loan. As a rule, by deciding to consolidate your debts, the loan period is extended. For this reason, it is better to analyze the costs before making a decision, because, in a few years of repayment, we can save a lot of money.