West of us, it is almost natural for people to look at the banks every 3-4 years and replace their existing loan with a cheaper one, saving a lot of money every month.
On the other hand, in Hungary, the redemption of credit is not so widespread, and few people know that with a good choice we can carve up to tens of thousands of our burdens monthly. We looked at the cheapest loans to say goodbye to our precious burdens in one fell swoop.
Now is the time to make your loan cheaper! Use our comparator calculator to find the best debt settlement loans!
Is this just another loan? What is a good redemption good for?
Many people are already reluctant to borrow a loan simply because it means taking another loan, so we are putting another financial burden on our necks. However, the key to success lies in utilization: we use the newly borrowed debt to settle debt. This means that the new loan will repay the old, expensive loan in full, ie prepay. This will get rid of your old loan and will only pay off your new, better-interest loan.
Of course, even with a debt settlement loan, we need to go through the same loan application process that goes with every borrowing: the bank controls our income, and if we take out a mortgage to settle our previous loans, the real estate appraisal also takes place.
Why should you borrow another loan?
As reference rates have declined over recent years, so have lending rates. This is how a $ 3 million loan taken at a 24-28 percent APR six years ago is now half as expensive as a full APR of 14 percent. Let’s say you have $ 1.5 million left to pay back.
There are three things that people who want to pay off the remaining one and a half million forints and the high interest rates and then repay the new loan repayment with a much lower installment within three years:
Same maturity, but less repayment: we take out a million and a half for debt redemption , now with a better interest rate, for three years. Our maturity remains the same, but our monthly repayment is significantly lower than our previous loan.
We pay the same amount of repayment, but repay the loan much sooner than three years: in this case, we undertake not to reduce our monthly burden and to continue to pay the same amount. Because this is how we repay the loan sooner, the maturity ends sooner than three years.
Both the maturity and the size of the repayment remain: we can do the same repayment for the same maturity as our previous loan. However, at that time, we can borrow a higher loan amount, more money. With this money, we will repay our old loan and use the remaining money to help us achieve our new goals.
How to Find the Cheapest Debt Loan?
Almost every bank now offers debt redemption loans. Depending on the conditions we meet (getting a payment to the lender, high income), we may receive interest rebates that can make our monthly repayment even cheaper.
Fortunately, you do not have to go through the banks’ offerings one by one when looking for debt settlement loans. Using our Billy Pilgrim calculator we can easily find the best deals. For example, if you choose the Good Finance Debt Arrangement Loan, you can take one and a half million for three years, to keep an example, at 13.46 percent APR. This will give you $ 49,814 a month.