I took out a loan to refinance another debt. What to do (or not)

The interest rate is competitive, the installment fits in your pocket, the term is sufficient … everything seems to be resolved when we find the tailored personal loan that will take the place of that heavy debt. Once the money falls into the account, however, it is only the beginning of a new journey with the same importance as the first.

At first glance, it is really tempting to see the bank account stuffed. But it is necessary to restrain the desire to spend this money because the result can lead to default – and several other consequences. So, let’s go to today’s tips:

What to do

As soon as you receive the loan money (only options with lower interest rates than the ones you have currently paid, ok?), Pay your debt immediately. Ah, of course, it is worth negotiating with the creditor and asking for a discount, after all who has money in their pockets has the power to bargain. Do not be shy! The chances of being able to pay less than the original debt are real and very attractive.

From there, you will have only the installments of the new loan to pay. Keep an eye on your spending and remember to save enough each month to keep up with your payment by the deadline. We even set up a scheme for you to understand better:

What not to do

Never incorporate the loan amount into your income! It is likely that, instead of getting rid of high interest rates and getting out of debt, you will wind up even more.

And how can this happen? You will have two debts running in parallel and thus two installments to pay each month. Instead of relieving interest payments in your budget, you have just increased it further.

Interest rates will consume money faster than the payment term. In the end, the risk is that of going back to the negative, with the aggravation of now having two debts to pay. The snowball is formed!

Now you’ve learned, right?

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