Have you taken up too many small loans? Has it suddenly become unmanageable to pay back to the many different creditors? If the answer is yes, then it might be an idea to get your loans together in one place. This can give you a better overview, lower interest rates to pay, fewer expenses and more benefits.
In this post, we will provide you with guidance on how to collect your loans in one place. But first, we will review a few benefits of collecting your loans through refinancing. Then we give you tips on how to get the debt together, either in your bank or in another loan institution, which can give you a better financial situation than you have right now.
You get a better view of your debt
If you do not have such good financial management, it can be difficult to see how much you really owe. Therefore, it can give you a better overview of your debt if you manage to collect it in the same place. It can significantly reduce your stress level when you have a clearer picture of what the status of your total debt is – in one place.
This also avoids all the window envelopes you receive from the horde of different creditors. This will also help to give you more security in everyday life, as it is a very stressful element for many to think about how much you really owe in total.
You pay less in interest and fees
Of course, the above is only true if you can get your bank or where you took out your loans to offer a loan with better terms than the creditors can offer. This should not be a problem, as the vast majority of lenders offering small loans have very high interest rates and costs.
Of course, you will not get such attractive terms as if you had no debt and had to take out a new loan, but if you are good at talking to you, you should be able to negotiate slightly better terms.
Get a full overview of your debt
If you have an opportunity to collect your debt, it is important that you are properly prepared. Of course, it starts with figuring out how many places you owe and how much you owe there. It can be a little confusing if you have neglected your debt for a long time, but start by finding out all the window envelopes that you probably received in your mailbox.
Write down information for each creditor. If they have sent you a status of how much you owe, write down the amount. If not, turn on the phone and call each creditor and find out how much you owe them. Write down all the amounts!
Get budget and fixed expenses under control
One of the things a bank will look at when it comes to taking over the loans is whether you have control over the budget and that there is money to pay on the loan. If they do not see that this is probable, the chance that they will take over the debt is relatively small. Therefore, it is important that you can at least show them that you have an overview of what your budget looks like.
If you don’t already have a budget, set one up. Here you must enter all fixed expenses you have for each month. These are items such as rent, mobile subscription, broadband, etc.
What if I have trouble paying the fixed expenses?
If you go into zero for each month or maybe even spend more money than you have, as part of getting your debt in one place, you should reduce your fixed expenses, otherwise you can look far to get collect your debt into a loan.
Every fixed expense needs to be considered and, as far as possible, you need to consider finding cheaper alternatives. Fortunately, this is simply for the vast majority of people, since one can easily switch to the smallest packages for TV, broadband, mobile subscription, etc. Usually, with this you can only cut a thousand or two in expenses per day.
If you are also considering whether it is possible to find a cheaper place to live, you will quickly find that these amounts to a lot of extra money each month, which you can instead use to repay your debt.