Do you not manage to repay loans? Debt Consolidation can save you

27 Jun

You just repay the mortgage and the car broke down. You need a new but financially just a lease, or another loan. Do you have overhead payments? Then debt consolidation is a clear choice for you.

Debt consolidation is not one that everyone knows and even scares many people because it sounds too complicated. In reality, however, it is one of the few rescues not only from execution but also from life under the bridge. Failure to pay bank loans is a serious matter. But by consolidating or merging all loans into one, it can be resolved.

What loans can be merged?


Loans of all kinds can be consolidated. Most often, however, these are overdrafts, credit cards, mortgages, leases, and even some non-bank loans.

If you apply for a merger and your intention is approved, the bank will merge all loans into one. In practice, it looks basically by paying for you everything you need and creating a new loan that you will pay for it in return. However, it is important to note that the repayment period will be significantly extended by debt consolidation.

Why consolidate loans?

Why consolidate loans?

If we neglect that it can be basically the only rescue from execution in case of a difficult financial situation, the other reasons are as follows:

  • Possibility to negotiate new conditions
  • You will pay only one installment per month, not two and more as before.
  • All you deal with is one creditor.
  • As this is a new loan, the installment will be significantly lower than the sum of several.
  • You also get a lower interest.
  • Possibility to increase credit and get more money as needed.


You can save up to several thousand a year, which gives the borrower the opportunity not to jeopardize the family budget, but rather to stabilize in the financial situation and even create a reserve for emergencies. However, it is important to note that, as with other loans, some debt consolidations face sanctions for early repayment.

Who will pay the most?

Who will pay the most?

As has been said, mostly for those who are unable to repay. But it can also help families who manage to repay, but at the expense of it, they have to save on their lives. Debt consolidation should also be considered by those who have their finances temporarily under their thumb, but if one of the spouses were given long-term incompetence, there could be repayment problems due to reduced income.

Maximum loan amount

Maximum loan amount

Of course, their amount is always taken into account when applying for a loan merger. So, how much you borrowed can easily affect the situation. In addition, many banks offer the possibility to merge only loans up to CZK 600,000.

Bonita or who will have a problem with approval?

If you think you just need to come to the bank, apply for it and then just have a contract signed, you are wrong. You can only be lucky with non-banking institutions. You may be refused by the bank if:

  • You are in bank registers of debtors.
  • Your monthly earnings are too low.
  • The annual percentage rate of charge (APR) can reach up to 20%.

Unification of maternity or parental loans

It is thanks to the significant reduction in monthly income that the risk of indebtedness on maternity or parental leave is even higher. Loan consolidation is then possible in this case, but it is certainly not guaranteed. Hardly any bank will approve this option without a co-curator due to reduced income or, for example, problems with defaults.

  • How to deal with unsolicited credit cards?

But the certainty of success, in this case, is for non-banking companies that are more benevolent. On the other hand, they often require property guarantees.

What to watch out for?

The Internet offers a series of calculators that can help you calculate whether debt consolidation is worth it. As already mentioned, the lower the installments you have, the longer you will pay. Banks have everything set up to earn them, don’t forget.

In addition, the hook can sometimes be hidden in too low installments. This may include, for example, an account maintenance fee or an inability to pay insurance rate. This information must also be taken into account.