Payday loans, i.e. loans granted with a minimum of formalities (usually an identity card and a declaration of the amount of income achieved are sufficient), are taken very easily. They can be the last resort in difficult life situations, when cash is needed “for now”, and we do not have time – or the possibility – to apply for a traditional cash loan. What, however, many of us forget is the fact that payday loans are quite an expensive solution. The ones that pay off most are those that are free, i.e. for people who enter a company for the first time. Each subsequent one is usually charged with a high interest rate, so you must do everything to pay it back as soon as possible. A good solution is therefore consolidation of payday loans in the bank. Unfortunately, this option is not available to everyone, not all banks offer it – and if so, many of them put additional conditions. Still, it’s worth considering this alternative. Let’s check how it works.
Who is the consolidation of payday loans in the bank for ?
At the outset, we must point out that this is not a solution available to everyone. Banks set more demanding requirements for their clients than non-bank institutions do. In return, however, they usually offer better conditions, which is manifested primarily in lower costs of obtaining financing, i.e. commissions and interest. Consolidation of payday loans in the bank is no exception. So what are banks looking primarily at?
- creditworthiness, which is de facto the result of several important aspects: the amount of our income, the amount of our monthly expenses and liabilities (installments of other loans and maintenance costs: food expenses, fees, fuel etc.) and the current discipline in the repayment of other loans. Here, too, we must say clearly: the bank may turn a blind eye to one-day delays in Retro, but that’s all. The consolidation of payday loans in the bank is really due to the best, most reliable clients
- type of contract under which we receive our remuneration – of course, banks prefer an employment contract, preferably an indefinite employment contract, although a fixed-term employment contract is also accepted. It is usually more difficult in the case of civil law contracts, i.e. contract-mandate and employment contracts as well as contracts or income from business activities. Here, in most cases, additional conditions will be required: e.g. an employer’s declaration regarding the long-term cooperation under civil law contracts or the minimum period of running a business (usually 12 months)
- our “credibility” as a debtor – as we have already pointed out, arrears in the Credit Information Bureau or the National Register of Debtors basically disqualify you in the process of applying for the consolidation of payday loans in a bank, not to mention a bailiff order or court order. It is also important that you can “show off” well, regularly repaid credit, even if it was an installment loan for the purchase of a mixer or washing machine. However, this is proof for the bank that you are a disciplined debtor and can be trusted.
So, as you can see, the requirements for people who are interested in consolidating payday loans in the bank are considerable. However, it should be remembered that their fulfillment allows you to take advantage of a relatively inexpensive option that will certainly organize our finances. So if you meet the above conditions, you should consider applying for this type of loan.
Consolidation of payday loans in the bank – is it worth it?
Meeting these criteria is not everything. The consolidation of payday loans in a bank is usually also associated with additional products that will accompany it. It is usually a requirement that among the consolidated payday loans there must also be a minimum of one loan taken out in a traditional bank. Often, you also have to set up a new bank account with a declared monthly receipt. The bank may also require that consolidated payday loans be paid back, e.g. in more than half. So, as you can see, the requirements for people who want to take advantage of the consolidation of payday loans in the bank are in fact high – but on the other hand, they are followed by advantages such as lower interest rates and lower commission. So if you are among those who can apply for it, this is a highly recommended solution.