Advanced Tricks With Credit Redemption

Almost everyone has come across the term “redeeming a loan,” but fewer people know how to really take advantage of it, and what’s really good about it.

The term implies replacing our existing loan, for which we are already paying off, with a better offer on the market .

With a home loan , a personal loan , or a credit card , the debtor can decide at any time to be more appropriate for him. It can also serve to make debt manageable. One of the cornerstones of recovering our finances is to review our loans. But it also comes in handy when you consider a new loan for your existing loan, but it is difficult to take on.

One loan instead of two


For example, we may have already taken out a loan and would need a new one for immediate release, but due to bank regulations, we may not be able to pay off more of our earnings.

In fact, financial institutions can raise the monthly repayment amount up to 40 percent of their monthly verifiable income. While it is not excluded that we have other income, money comes into the coffers, but due to strict bank regulations, the earnings taken into consideration for the loan are less.

So you can’t run two loans side by side

So you can

Even though we really need the extra money. However, it is possible that if you look around, you will find another loan that adds up to the additional loan, and where the monthly repayment installment still fits within the level of the payload. That is, we get a higher amount but with a more favorable repayment.

There is also a good chance that we will be able to switch to a cheaper loan because the repayment installments have been much lower for several years.

Another pro tip for redeeming a loan


If you have taken out a loan for a purpose earlier – home modernization, renovation, expansion – that can be linked to real estate, it is definitely worth looking at possible home loans. The latter have much better interest rates and APRs.

Keep in mind that 1.5-2 percent differences in APRs, say fifteen, twenty years, can be millions of forints plus or minus.