The fact is that the source of income for any bank is interest on loans. Naturally, the early repayment of the loan deprives the institution of a certain part of the income on which it already expects. In such cases, some banks use fines and early repayment fees. Sometimes they are equal to the total amount of interest that the structure expected to receive. But recently, many lenders have become more loyal to such hasty borrowers due to the low payment discipline of the population. Therefore, many consumers can now safely get rid of obligations ahead of time. But can there be situations where the borrower seeks to pay off, even without free funds. This situation may have different reasons:
- Too high interest. Sometimes customers are even willing to take a cash loan to pay off another loan;
- Redemption of property from the pawnshop. It may happen that it is urgently needed, and the interest on such a loan may even exceed the liquidation value of the collateral itself;
- The expiration of the loan period. Sometimes the situation in life makes it not possible to repay the debt on time or the grace period on a credit card expires, then the consumer can take a loan to pay off a credit card.
Thus, sometimes you can even think about how to repay a loan with another loan. This option may even turn out to be more profitable than simply paying off the original loan. But where to get a loan to pay off other loans?
Is it possible to take a loan if there are other loans?
It is no secret that the bank, before issuing a loan, very carefully examines the future debtor. Many factors are taken into account:
- Level of documented income;
- Quality of credit history;
- Marital status and number of children;
- The level of education;
- The presence of a car;
- Availability of other loans.
Let’s stop our attention on the last pint for a moment. The fact is that banks are reluctant to give loans if the client already has such in other banks. This fact can reduce the client’s solvency and affect his payment discipline. It turns out that not every bank will allow to receive or take a loan if there are other loans.
In which bank can I get a loan to pay off other loans or other liabilities?
As a rule, banks, creditors with financial liabilities, adequately assess their potential risks and include them in the interest rate. This makes such loans not the cheapest, but sometimes there is simply no other alternative. In addition to banks, some microfinance organizations and private lenders are also ready to provide such loans quickly.
They can really help if you need a loan to pay off other loans. The essence of their activities is close to banking, but the scale is much smaller, and the organization of work is easier. This allows them to respond much faster to customers’ requests, make a quick decision on issuing loans and transfer funds. In addition, they are much more loyal to customers who want to take a loan to pay off other loans. You can also try to take funds against the pledge of valuable movable property in a pawnshop, but this is not very convenient, and it requires the alienation of the pledge to full repayment of the debt and interest.