What should you check about the new debt consolidation offers?
If you want to be convinced about the usefulness of a new debt consolidation loan, you should consider several aspects. First, you will have to ask what the new duration of the credit is. Second, you will have to see if the ongoing debt you have could be completely refinanced with this option.
For example, for a credit of 10 000 dollars, let’s suppose you have 8000 dollars to pay for 3 years, at an interest of 10 %, so the rate is 258 dollars. The debt consolidation officer might propose you a new rate of 190 dollars. At the first impression, the offer might look good, but if the credit is offered with an interest of 15 % for 5 years, you will realize that you need to pay more on the overall. We are talking about 2000 extra dollars so refinancing is not such a great option in this case.
Another method used by the banks to encourage the clients to refinance their credits is to give the impression that refinancing is free. You will find some offers with no approval commission, and no partial reimbursement commission. However, when it comes to the interests of the respective credits, you might realize that in reality, you will need to pay more for the respective debt consolidation option.
