In the case of serious problems with repayment of debt, debtors often cannot count on the help of banks. These institutions will certainly not grant them a loan that will allow them to consolidate their liabilities. In the described situation, a debt relief loan or consolidation-debt relief loan may be a possible solution to the problem.
It is offered by numerous companies from the non-banking sector. Many such enterprises specialize in servicing clients who have problems related to bailiff seizures and history in the register.
A mortgage loan may prove to be the last resort
Non-bank companies apply different rules for granting debt relief loans. Despite this, you can indicate several features that are typical of the described financial products. It meets the requirements of the Consumer Credit Act. Therefore, people using remediation can count on special legal protection. One of its manifestations is the possibility of withdrawing from the concluded contract within 14 days. In this situation, the customer will only bear the costs associated with:
- interest (calculated in proportion to the period of actual borrowing of funds),
- administrative and notary fees.
In practice, each debt relief loan operates on the basis of debt consolidation. The company offering such a product repays the customer’s commitments or transfers money directly to the account of the person concerned. This procedure contributes to the reduction of monthly installments. Its side effect is an increase in the total sum of costs related to interest, commissions and fees.
When deciding to obtain the described loan, you should allocate the money to the purpose specified in the contract. This is to settle arrears. Otherwise, it may lead to the creation of credit loop.
Additional security is always welcome
It is worth adding that the companies granting retirement loans bear a very high risk related to the insolvency of their clients. Therefore, the costs of such a loan can be very high. Due to the statutory maximum interest rate limit (currently 16.00% per annum), lenders compensate their financial risk with additional fees, commissions or collateral.
People with real estate or mobility can present them as collateral, which allows reducing the cost of the loan. However, you should remember to read the signed contract carefully and make sure that all entries comply with the law. When obtaining a repayment loan, you need to be much more cautious than with ordinary loans.