Saturday, July 13

Debt consolidation loan: how to reduce the debt burden on the mortgage

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Debt consolidation loan as a solution for multiple loans

As in the rest of the world, the Israeli government raises interest rates to control inflation. Accordingly, mortgage and consumer loan repayments are increasing. Repayments can increase by several thousand shekels per month, which against the background of rising prices for goods and products is a tangible change for many families. Debt consolidation loan, which makes it possible to distribute the debt on loans, will help reduce the burden. In addition, according to experts, now there are optimal conditions for such a step until the Central Bank has not changed the rules for obtaining a mortgage.
Households often find themselves in a situation where they cannot repay a loan. To cover the debt, they take out another loan. As a result, the process is no longer controllable and reaches the BDI mark – negative credit status. A good solution is consolidating your previous loans, including your mortgage. In this case, the interest rate will be lower than for standard loans. In addition, this option will allow you to clearly plan your expenses and stick to your existing budget so that you don’t go into debt.

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Before resorting to consolidation, the financial advisor evaluates the borrower’s situation. In some cases, it is possible to restructure only some part of the mortgage. To do this, an addendum is taken from the bank where the latter was arranged, which has low-interest rates. This option allows you to combine all existing loans and reduce monthly payments on them by about 50%.
For each family, experts make an individual financial recovery plan that best fits the amount of debt. In this case, experts estimate the family’s income, the value of the property, the age of the borrower, and total expenses for the month. Next, all loans are combined with the mortgage into one new mortgage loan, the payments on which in most cases are half as much as the family was paying before. This result is achieved by lowering the rate and the difference in various indexes.
Consumers cannot do consolidation on their own because the process requires professionalism and consideration of many details. It is better to use the services of financial consultants, who will help to find the best option and attract the bank with the best conditions for the consumer. The specialist makes a plan of action, having previously agreed with the client, and only then begins the process of consolidation. All aspects of the new loan are thoroughly discussed – its amount, interest rates, number of years to be paid, and the number of monthly repayments. Thus, the consumer is aware of all the actions of the consultant and is confident in the successful outcome of the cooperation.


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