How to exit the credit loop | A consolidation loan

Currently, hardly anyone pays only one liability at a time. It is easy to fall into a loop of loans and credits, as a result of which you are not able to pay off everything on time.

This involves adding interest, and eventually even by the intervention of a bailiff or debt collector. Therefore, the question is more and more often asked how to get out of debt or how to handle it all.

It is not easy to answer them, but with a little effort it may turn out that there is some light in the tunnel.

Try negotiating first

Try negotiating first

Many heavily indebted people hope that if they ignore the problem, it will simply disappear by itself. However, this never happens. It is worth meeting it, especially if so far the matter is not as serious as it could be. Contrary to appearances, very often banks and other creditors are willing to enter into a dialogue with the debtor because it is in everyone’s interest that he finally repays the debt in some way. If the bailiff intervenes, eventually most of the money he recovers will cover the costs of his actions alone, and only a small portion of the funds will actually be allocated to cover the debt.

Therefore, if we contact a bank, loan company or debt collector instead of running away from them, in many cases new options will open up to us. This could be, for example, credit holidays or spreading the commitment over more installments. It depends of course on the goodwill of the creditor, but there is a good chance that he will want to cooperate with us. You should not give up immediately and try all the options available. Thanks to this, we can potentially save ourselves a lot of nerves and problems.

A consolidation loan

A consolidation loan

One of the most interesting options for getting out of debt are consolidation loans. They consist of incurring one new debt to repay several or a dozen presents. As a result, we change numerous installments of varying amounts and interest rates into one, lower than their sum. Thanks to this, our home budget will be able to breathe quickly. However, it is worth remembering that although the monthly installments will be lower, the repayment period will be longer and thus the total cost of the loan will increase.

Thanks to the consolidation loan, we can simultaneously repay various liabilities, such as loans, credits and credit cards. We will not receive the loan amount directly from the bank, and it will take care of its allocation to the previously defined purposes.

People wondering how to get out of debt or how to overcome it all can feel overwhelmed by their difficult situation. However, it is not without a way out.

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