Is a loan to pay off a loan a good idea?

In a sense, this is a shortcut and a good solution, but only for a moment. If you have had trouble repaying your loan so far and are looking for a loan to pay it back, be aware that it may be worse … Remember that loans are offered on worse terms than loans and it will be difficult for those with a limited budget to pay back this type of liability on time, and as a result – there will be interest added for each day of delay. Loan companies also tend to add additional fees for sending reminders about the repayment of liabilities, about which we wrote in the article “I am in arrears with payday loans! What to do?”.

Lifebuoy or nail in a casket?

Lifebuoy or nail in a casket?

Borrowing loans to pay overdue installments is the fastest way to lose control over your finances. With one loan you will be able to pay back the loan installments, but how can you pay back the loan? Going in this direction, you can take another – to pay off the previous one. This is how you fall into the classic debt spiral, where your debts are rising instead of decreasing. After all, there will be so many loans that losing control over their repayment is only a matter of time.

A prescription for debts

A prescription for debts

Each creditor wants to get his money back, so if we are in default of payment, sooner or later we will receive reminders to pay and later the bailiff will take our account to recover the money due. How to prevent this?

Just contact the lender or lender to renegotiate the terms of repayment. If you don’t know how to do it – take advantage of the knowledge and experience of mediators. They are effective negotiators, they can propose on your behalf, among others about:

  • Installment reduction,
  • credit holidays,
  • partial or total cancellation of accrued interest
  • suspension of bailiff execution or reduction of its nuisance.

Debt relief is a difficult process that requires commitment, but only for the benefit of both the debtor and the creditor. After all, restructuring is very good, if not the best solution for both sides. The bank can be sure that the debt will be repaid on time, and the debtor will have peace and control over his own budget.