Taking out a loan to pay off debts , is this a good idea? It may sound a bit like you are going to mop while the tap is still open, but it can still be useful to do this. However, there are a few things that you should pay attention to when taking out a new loan, including the conditions. Otherwise it can be disadvantageous for you even if you get some air because you have extra money. By being smart and following our tips, you can not only pay off your old debt or pay off debts, but also lower your high interest rate with a lower interest rate.
Taking out a loan to pay off debts
It is especially important to read carefully in advance if you are going to take out a loan to pay off debts. Because it is not always possible to pay off all debts with this method. So you cannot just take out another loan in the hope of paying off the other loan.
With old loans it sometimes happens that you are not allowed to repay a loan in one go to get out of the high interest rate. Hence, it is wise to stay far away from these types of loans.
If you have a debt to, for example, the tax authorities, your health insurer or housing cooperative, you can pay off this debt with a loan. You should certainly keep the latter as a friend to prevent you from being evicted.
There is something else you should pay attention to when taking out a new loan to pay off debts, such as a personal loan and a revolving Credit. You should not have a negative BKR rating , otherwise the whole party will be canceled.
A loan with a lower interest rate is the best way to reduce your monthly costs of this loan, so that you can use the money you have left to make extra repayments. This is also called refinancing a loan .
Borrow money with debt
Taking out a new loan has a different term, interest and conditions. You can borrow money to pay off debts if you meet a number of conditions. Taking out a loan to pay off debts is therefore not easy.
Firstly, you may not have a negative BKR rating. A negative valuation often does not mean a new loan. Your credit application will be declined. There are still so-called debt forums where you can borrow money privately, but do not borrow here! You do not know who you will be dealing with, and there is often no authority to keep an eye on things. Then debt restructuring is an even better option.
Pay off your debts with a new loan
A BKR check is not an obligation for lenders. Whether you can take out a loan to pay off debts will therefore depend on the lender. So you can be in the red and still get a loan. You can use this to pay off debts such as a debt to an energy company (energy bill), credit card or purchase at Wehkamp.
However, always pay attention when taking out a new loan. Borrowing money does not have to be the solution. There are often other options that can help you, such as spending less money and saving, finding an extra job, asking your employer to work more hours, selling unnecessary items and paying off your debts with that money.
Perhaps you can think of other options yourself.