On the Internet, you can easily find many proposals for debt relief loans. Such offers are intended for persons struggling with repayments of previous commitments (e.g. installment loans, cash loans and “instant loans”). Companies providing debt relief loans are not, however, subject to supervision such as banks and cooperative savings and credit unions.
Non-bank consolidation, i.e. the last resort
At the beginning it is worth explaining a few issues that cause problems for debtors. They are related to quite specific provisions of national law and ambiguous names of financial offers.
Non-bank lenders (including drainage companies), as well as banks and credit unions must comply with the provisions of the Consumer Credit Act. A person taking out a consumer loan (consumer) is subject to special legal protection. The consumer may withdraw from the contract within the first 14 days without giving a reason. Any financial institution that does not allow withdrawal from the contract or violates other customer rights can be appealed to the Office of Competition and Consumer Protection.
Some debt relief companies, as intermediaries, offer consolidation loans from the offer of banks and credit unions. Due to the bad history of checker, most of the people in remoteness cannot receive money from a bank or cooperative cash register. In this situation, the debt relief company lends its own funds, which can be used to pay off the customer’s debt. Due to the long repayment period, the monthly installments are lower. Extending the repayment period also increases the total costs (including interest). However, for a person who has serious financial problems and is threatened by enforcement, this issue goes to the background.
A mortgage or pledge will significantly reduce the cost of the loan
Most of the drainage companies accept clients who have bad credit history or bailiff seizures. Lending cash to such people involves considerable risk. That is why the total cost of using the appliance is high. Apart from the interest rate on the debt relief loan (maximum 12.00%), you have to take into account the high level of administrative fees and charges. Information on costs should be provided in a special form. This document must be prepared by every institution offering consumer loans. Before signing the contract, you can take the information form with you and read it at home.
Customers with valuable assets (e.g. a plot, a flat, a single-family house or a car) have a much cheaper way of using the water. The item on which the loan security (mortgage or pledge) will be established should not be encumbered with another liability. If there is already one mortgage in the land and mortgage registers of the example apartment, then not every waiver company will agree to borrow money. The same principle applies also to movable pledges (examples: car or motorcycle).
After some time, the debt can be transferred to the bank
Due to the high non-bank costs, discharge should be treated as a last resort. Thanks to this solution, they have more time to catch their financial breath. It is worth noting that good debt relief companies carefully check the customer’s credit history and other registers. After such an analysis, you can determine whether there is a chance to quickly delete troublesome entries. People who have successfully “cleared checker” do not have to take advantage of the offer of non-bank loans for a long time. After removing troublesome entries in checker, the debt can be refinanced with the help of a bank or a cooperative savings and credit union. Then the customer applies for a simple consolidation loan.