Consolidation loan – ranking of consolidation loans 2020

The definition of a consolidation loan may seem complicated at first. It is a liability incurred to pay off other debts. What does this mean in practice? That banks offer a consolidation loan for those in debt, that is, for those who have problems paying off other liabilities.

Consolidation loan – is it worth it to decide on it?

The question often arises: consolidation loan – is it worth it to decide on it? To be able to answer them, you need to analyze the pros and cons of this solution.

What characterizes a consolidation loan is the ability to “merge” all existing installments into one, with a common interest rate. Most often, the bank selects the terms of the contract in such a way that the debt consolidation loan generates a lower installment than the sum of previously repaid installments. This is easiest to understand by example.

If you have drawn a total of 4 credits and loans, and for each of these obligations you have to pay an installment of USD 500, you pay a total of approx. USD 2,000 a month. In contrast, consolidation loans are structured to reduce this amount, e.g. to USD 1,500. And we will discuss in detail how the consolidation loan works.

Importantly, it is possible to consolidate a mortgage, cash, car, loan or even credit card. Is it worth it?


Consolidation loan – how does it work and is it profitable? The answer is: it depends. From what? In fact, from your financial possibilities.

The purpose of loan and credit consolidation is to reduce the total amount of monthly liabilities. This has two major benefits. First of all, you don’t have to worry about paying off several debts, which increases the risk that you will forget about one of them.

And secondly, you pay less. This will allow you to improve your budget and optimize expenses. This is good for people who are worried that they will not be able to pay all installments on a monthly basis.

However, you must be aware that the bank also wants to make money. Therefore, it extends the repayment period, thanks to which it can reduce the installment amount as well as the interest rate.

And the more installments you pay, the more interest you have to pay in total. In practice, it turns out that the consolidation loan is more expensive than the sum of other liabilities. So looking at it only from a mathematical point of view, it is unprofitable. But there are other factors.

As it has already been signaled, the consolidated loan allows to relieve the household budget, reduces the risk of falling into insolvency. In addition, in this way, you maintain a positive credit history (because you are still able to pay lower installments), and thus – your ability to incur further obligations does not decrease.

You also don’t have to worry about complicated procedures, because an online consolidation loan is usually offered, so you can do most of the formalities online. And who is the consolidation loan for?


The loan for the repayment of other loans is intended for people who have problems with repayment of obligations previously incurred or for those who prefer to have them in the form of one installment. However, you need to know that other conditions must be met if the loan is consolidated in a bank and different if in Good Finance.

Although banks offer a consolidation loan online, this does not mean that they do not check their clients. We will write about the conditions that will still have to be met, we would only suggest that you should apply for such assistance before you even start having problems with paying off your obligations.

If information about irregularities in payments appears in the GFIC, the bank may reject your application because it means a greater risk for it. The exception is when you have additional security.

What is the other option then? A debt consolidation loan that is offered by Good Finance. Obtaining it is often easier, many non-bank financial institutions advertise that they can get a consolidation loan for those in debt with a bailiff.

At the same time, one has to take into account that its interest rate may be higher, and thus – the actual cost of the committee will be more expensive. However, the possibility of using one of these two solutions means that everyone can really get a cash consolidation loan.