Transition from short-term to long-term loans

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Borrowers often think about a smooth transition between short-term and long-term loans. Why is it very difficult to reach immediately for long-term loans without knowing the short-term potential? About this a few words in the article below and also on Kredomania.eu .

Making a positive credit history is extremely important

Making a positive credit history is extremely important

First and foremost, you need a positive creditworthiness to incur long-term debt, which is made up of many factors by default. It is mainly the level of earnings or even marital status, although you usually enter this data in the loan application as an option. You can do it but you don’t have to. Very often you forget to build a history of repayment of existing liabilities. Why is this so important? If you go to a retail bank for a long-term loan, and you have not had any contact with the credit market before, you are unlikely to receive a good answer. Why? Retail banks prefer any lender information than none. For this reason, taking out a cash loan, or even a few, before getting involved in a larger debt is a very good idea. Of course, the indicated strategy falls out of some planning, action ahead. After paying off your short-term debt on time, you get a better credit ranking and move freely in negotiations with financial advisors.

Monitoring interest rates in the economy

Monitoring interest rates in the economy

The transition from short-term to long-term loans is best done at very low interest rates. For now, the economy is at a stage of reduced interest rates, but along with the increase in inflation there will be a change in monetary policy. For this reason, the borrower should monitor the actions of the bank to simply better secure his own interests. Retail banks usually prefer debt in the banking sector, and less in the para-banking segment. Some borrowers have big problems when they get too involved in payday loans, which are definitely short-term. Persons taking out payday loans are not very trusted by banks, so take this into account in your own debt strategy. The problem of switching from short-term to long-term loans is often significant, which is why repayment of small loans before signing a large contract is not only a good economic organization, but also a kind of test for the household budget.

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