The concept of taking out a loan to pay other loans may sound like a mad dream where you get into a credit spiral of death. But in practice this option is fairly common and people usually use non-bank no interest loans to repay other non interest loans effectively just transferring that loan amount to a different company and not paying those huge extension payments.
In general borrowing is not advisable because you are living over you income and are creating a personal budget deficit but when there is an emergency or a situation that you just can’t get out of without a loan then online loans are a great way how to get out of those situations. But because these online loans have very short repayment terms people often need to extend those terms but that also costs money and adding that to the ever increasing interest rates could mean a financial devastation. That is why some clever borrowers figured out that you can use those zero interest loans to your advantage and create a sort of loan chain by paying back one loan with another zero interest loan. Because those loans are without any interest you will not need to pay those credit extension sums and you will be able to save enough money to finally repay that debt.
*რეკლამა
Of course this credit chain can easily go out of hand if you miss one payment or a creditor does not lend you those additional funds but the worst case is that you will have to pay an extension fee or a late payment with some penalty interest and if you pay those in time then your loss will be minimal. Usually you can borrow money from different loan companies and the only thing that you can’t do is to get a loan from the same company except when you take out a line of credit as then you can get additional loans without the need to pay back the first loan.
People have sometimes also taken out these fast loans to pay their mortgage monthly payments but that is not a smart move because in the next month you will have to pay back your loan as well as the next monthly payment and that can be too hard to handle with a limited budget. That is why you should be careful and only take out loans for other loans if there is no additional costs and you are just extending you payment term.
Loan combination
And another great way to use loans to pay back other loans is to merge together multiple short term loans into one larger consumer credit by simply taking out that larger debt and paying back those smaller ones. With this option you will always pay less interest and you have less hassle with all those payments to various companies. But don’t act responsibly and use your new loan to party or do other crazy things. If you are determined to take out a loan to pay back other loans then do that and start acting responsible and slowly crawl your way out of that debt hole that you have made for yourself!
