Stressful or monthly repayment? Would you like to repay your previously borrowed loans or loans on more favorable terms? Then you are in the right place, because you have been granted a loan loan, also known as a debt settlement. The purpose of these loans is to replace your existing loan (or even more) with a lower interest or shorter term loan. If you want to switch to a cheaper loan and you have the opportunity to get a loan, we recommend the following compilation.
You can use these types of loans to switch loans
You can use a personal loan or mortgage for debt settlement, depending on the amount you need to arrange. For both types of loans, you can avail of free-to-use loans, but you can also find credit products for banks for separate debt settlement purposes, which are often more favorable than freely usable versions. With a credit-redemption loan, you have the opportunity to replace almost all loans, whether it is a home loan, a personal loan, a credit card debt, a credit for goods, an overdraft, a car loan or a quick loan. If you have taken several of these earlier, this will not be an obstacle as you can switch to more loans if you decide on debt settlement.
Before you apply for a credit-redemption loan, you should decide what your primary goal is with it. There are three ways you can decide which one is most useful for you.
- If your goal is to reduce your monthly installment: in this case, you will get the same amount of credit as you can with the original loan, and you can continue repaying with a lower installment at an unchanged maturity.
- If the goal is to shorten the term: in this case, the amount of your loan will be as large as the remainder of the previous loan, and the monthly installment will remain, but you can repay in less time, so you will be relieved faster of the burden.
- The repayment installment and the maturity will also be the same, but you will get more money than the original loan. So after the final repayment you will have no other choice but to spend the remaining amount.
So choose a loan-out loan!
Credit redemption may not only be an attractive solution if you have a problem with your past credit and want to reduce it. If you do not have a problem with your old credit, then you may want to check your bank bids at times, because money market and economic changes may be more favorable than what you had when you applied for a loan. For example, those who borrowed around the year 2012-2014 received on average an interest rate of around 25 percent on personal loans, and today the same figure can be as low as 10 percent. In this situation, the borrowing loan can result in a repayment installment of tens of thousands of forints a month, which is a great help to the family coffers.
Let’s look at a practical example: while we could add 2 million forints for five years, for example, with 21.05 percent THM, the total amount to be repaid would have been 3,129,660 forints at the end of the term; THM, so the total amount to be repaid will be HUF 2,432,100. Thus, with the cheaper credit, we save nearly seven hundred thousand forints.
Personal loans can be applied for up to 10 million forints, which you can fully spend on loan redemption. However, if this amount is not enough to replace your existing, more expensive credit, you can also use your mortgage loan to settle your current debt. The procedure for applying for a mortgage loan is time-consuming – just like applying for a home loan – and it is much more complicated to apply for a personal loan, since the bank not only examines your monthly income and expenses, but also the real estate cover, which takes more time for valuation. If you would replace your existing loan with a mortgage-based loan, check out the details on Bank360 .
Choose the offer that can save you the most money! Our Credits Loan Calculator helps you navigate through bank offers. You can also compare and rank the best deals based on THM, installment, or total refund.
This happens with your old loan
If you use your existing debt as a loan for free use, you can ask for a full prepayment of your older loan after the disbursement of the former bank. This means you pay back your outstanding debt in one amount. In the case of a debt rescheduling loan, the banks will arrange the replacement between you, and you will only receive money if you require a higher amount than is necessary for the replacement.
The prepayment typically has a 1-2 percent fee compared to the prepaid amount, so you might want to consider exactly how you schedule the repayment. It is worth paying attention to the fact that some financial institutions may have different rates if you settle your outstanding debt and not your own resources from the credit of another bank.
Calculate Expensive Consumer Loans: Debt Settlement Credits for Credit Card Debt and Credit
The replacement of credit card debt, credit and small loans can be solved more easily than home loans, and it is also possible to make more small loans with a single loan-to-personal loan. The biggest advantage of this is that the personal loan is much cheaper than a credit card or overdraft. Another convenience is that you only have to pay one monthly monthly instead of several installments; This will make your expenses more transparent and traceable, which will save you from much unnecessary stress.
The biggest advantage is that you replace your more expensive consumer loans with a personal loan that you can use to save money. Since the credit card and overdraft rates are much higher than the personal loan, the replacement will be much better in the long run. The APR for credit card debt is typically 38-40 percent, but it is not cheap for credit and overdraft. The interest rate on the goods loan can reach 35 percent and the total interest rate on the loan is 40 percent, and the annual interest rate on the overdraft is typically 20-30 percent depending on the bank offer. Compared to this, loan redemption loans can be applied for less than 10 percent THM, so you can switch your expensive loans to a cheaper one.
Benefits of Debt Settlement Personal Loans:
- You can claim up to 10 million forints
- there is no need for real estate cover, which makes it easier to claim
- you do not need your own power
- for most offers you can expect a fixed interest rate until the end of the term, so you don’t have to worry about changing installments
- In addition to the loan changeover, you can apply for an additional loan amount
If you are applying for a personal loan for loan redemption, then the same conditions will apply to you, as if you were a personal loan:
- You must fill the minimum age set by the bank, typically between 18 and 23
- you have a registered, permanent residence
- you have a phone or mobile phone connected to your home
- you have a regular, regular income that reaches the minimum amount required for the loan application
- you have been working at your current job for at least three months
- you are not on the CCIS’s negative debtor list
- as a sole proprietor, you have at least one full business year closed (there is also a minimum duration of the business relationship)
You will need the following documents as an employee:
- valid Hungarian identity card or passport or driving license
- home address card with permanent address in Hungary
- tax card
- up to 30 days employer certificate
- usually the last 3-month bank statement that shows you get regular income
- previous month’s utility bills and phone bill with payment certificate, for your own name and address
- bank account statement for the past 3-6 months, including payroll credit
If you have been a customer of the selected bank before, you may have enough of an extract, if not, you will probably need more certificates, but that is always up to the bank.
As you do not have to take weeks to apply for a personal loan, the replacement of a personal loan and consumer credit will not take more than a few days if the bank finds everything right. Because there is no need for real estate collateral, you can close your earlier, expensive loan with early repayment within a few days, and then you only have to repay the more favorable, lower-interest loan.
You can sort the different bids in a single click based on the total credit repayment indicator if you use the Loan Calculator . The comparison can also be made according to the bank, the monthly installment and the total amount to be repaid. Try the calculator now and choose the best deal for you!
What should you do if the credit change is not an option?
The bank may refuse your credit application and you may not replace your existing credit. There are several reasons for this, so you may want to find out about them before applying. There may be a negative reason if:
- you are on the negative debt list of the Central Credit Information System (CCIS)
- you do not have adequate income
- you can’t offer a real estate cover
- you have a backlog of installments
If the change of credit does not come into consideration for some reason, the most important thing is not to wait until the house begins to burn: if you feel that it may be a problem for you in the coming months to pay the installment, contact the creditor bank. Since their interest in not becoming insolvent is likely to try to find a solution that will help you to alleviate your current burden – but unfortunately there is no guarantee that this will always be the case. In general, it is possible to temporarily suspend repayment, to restructure debt repayment, and in rare cases to release a repayment installment. Most importantly, you are in trouble to get the time to negotiate.
Credit redemption is not possible if you have a problem with your credit history, for example, you are slipping with the installment or you are on the negative list of the CCIS. The Central Credit Information System’s negative debtor list is posted if you had a slip or payment failure with repayers older than three months and the amount reached the minimum wage. In short, you need to have an immaculate repayment history to successfully trigger your loan repayment.
Secure yourself: Credit insurance can help you out of trouble
Whatever the credit you would like to make, it is worth considering the possibility of securing credit. It can happen to anyone for a long time to get out of work for some time or get sick, so you should also prepare for this possibility. If you have such insurance, the insurer will, under certain circumstances, pay the installment. Such a circumstance may be a serious injury, incapacity or death, in which case the insurer may pay the full amount of the loan. In the case of unemployment, he usually takes several months of repayment. Credit insurance can be concluded through the bank as group insurance. The cost of credit insurance may vary from product to product: you can increase your monthly installment by up to 2-10 percent.
In the event that credit insurance is not an option, continuous communication with the bank is even more important to ensure that they are willing to pay.
Loan Replacement – Think and Live With It!
If you are thinking about making a loan change, you should start now. The current interest rate environment is particularly favorable compared to recent years, so you should recalculate whether it is worthwhile for you to start the procedure due to the change. An additional advantage of the credit redemption is that the repayment of loans that can be taken today is more predictable than a few years ago. In order to avoid over-indebtedness, legal regulations were created, popular before the crisis, but risky foreign exchange-based loans virtually disappeared from the market. You can also choose the length of the interest period, depending on your vision for the future. If your income is higher than the net 250,000 HUF, you can also count on interest rebates, which will further reduce your monthly installment fee.
The Credit Change Calculator helps you make a good decision , where you can compare the best deals. In each case, the calculator calculates the best possible bid, taking into account the terms of the bank notices. Different types of loans may differ from one bank to the other, so you should also consult the banks’ website about the conditions and possible personalized designs.