Acquired credit card debt, current account overdraft, and home loan repayment are burdens that are difficult to keep track of. In order to simplify the monitoring of all financial liabilities, loans have been created to close the liabilities.
The goal is a number of different obligations that the borrower has to replace with a single loan. Wondering how to borrow money urgently, it’s time to react! Undertaking multiple different loans under one obligation reduces the costs of fees and interest that the client would normally pay.
Commitment closing loans vary
In the case of debt repayment or rescheduling loans, distinction should be made between those intended for rescheduling due to unforeseen circumstances such as loss of business and those for closing multiple different bank loans, such as more cash loans, or current account overdrafts. Payday loan loans are quick loans that can usually be obtained within 24 hours.
Reprogramming changes the repayment plan of the existing loan that the borrower has, while refinancing closes the existing loans and opens a new one that integrates all the obligations that have been hitherto. This also means that liabilities that are not repaid by debtors are duly rescheduled, while liabilities that are repaid are duly refinanced.
Reprogramming loan to close commitments
The program changes the terms of the existing loan and most often extends the repayment period of the loan to close the liabilities to several years, thus reducing the monthly installment. At the same time, with this lowering of the installment, the total debt increases as more repayments and interest are paid with longer repayment periods.
Most often, the repayment period changes, a moratorium on repayment is granted, which in principle means that the principal is temporarily frozen and only interest is paid and security instruments are changed. The loan beneficiary usually has the option of choosing when the monthly annuity will arrive for payment and may change it when rescheduling the loan. The fee ranges from 0.5 to one percent of the outstanding loan principal.
Refinancing loans to close commitments
Refinancing is the closing of existing debts and loans with one new one. Thus, a home loan minus a current loan and a cash loan cannot be refinanced, but a single loan can close non-purpose liabilities such as a current account minus, cash loan, credit card debt. When borrowing a new loan, most commonly occur are all the usual expenses, such as the fee for granting that loan, the notary’s fees …
The specialty of this type of loan is that it is purely dedicated. The money from the loan is paid directly into the account of the loan beneficiary with the obligatory proof of closing the liabilities, and up to 30 percent of the amount can be realized in cash. This means that it is paid out by a bank or other financial institution for a specific purpose and should be used solely for that purpose. The interest rate on this type of loan ranges from five to 10 percent.
All you need to know about payday loans
The long-term special purpose loan is intended to close the liability, to other banks and / or other institutions. On average, loans to close liabilities are contracted for a maximum period of 15 years. The minimum amount given to the loan seeker is around one thousand euros, while the maximum is from 35 to 50 thousand euros.
In addition to long-term non-purpose loans, there are loans to close liabilities with a short-term repayment schedule. On average, they are paid for a 90- 365 day repayment period. Most often, these are smaller amounts of up to HRK 6,000 thousand that sit on the account within one day of submitting the complete documentation. Considering that they are smaller sums of money, only an ID card, current account card and payroll or pension list are sufficient.