The reason why you don’t get a loan

What is a loan in exchange?

Loan to Loan A loan that converts an existing debt into a new one. A new loan will repay the balance of the previous loan and include the remaining amount. The main reason is to reduce interest expenses by converting the debt into a new loan with a low interest rate. Loan to take over the loan with better conditions by resetting several conditions, such as the loan interest rate and the loan repayment period.

Find out the pros and cons of loan-to-value loans

the merits of a loan-to-value loan

Reduced interest costs:
Loan-to-value loans allow you to lower the interest on your existing debt. This can create a better financial situation, along with a decrease in your monthly repayments.
Avoid interest rate volatility:
If the interest rate on an existing loan is volatile, the loan can repay the loan at a lower interest rate. This makes it easier to predict the amount of the loan.
A loan-to-value loan allows you to tie your debt together. This makes it easier and more convenient to manage your repayment schedule.

Disadvantages of loan-to-value

Limitations based on credit ratings:
When applying for a loan, there may be a loan limit depending on the credit rating and credit rating history.
Remaining interest expense:
Even if your loan balance decreases, you may still have to submit unpaid interest during your existing loan repayment period. This could result in continuous replacement of your debt with higher interest rates or additional loans at higher rates.
Burden of loan costs:
If the cost of a loan is high, choosing a loan in return can make the situation worse. If the loan interest rate is higher than the repayment cost within the loan repayment period or there are additional fees, a careful choice is required within the repayment period.


Considerations when choosing a loan in exchange

Interest Rate: Loan interest rate is the most important factor in a loan-to-value. The lower the interest rate, the lower the monthly repayment amount and the lower the overall interest expense. You should select the appropriate product by comparing and analyzing the interest rates of loan-to-value products offered by various financial companies.

Repayment Period: Loan repayment periods must be carefully chosen. Longer repayment periods result in more various collateral principal and interest, interest, and fees. Therefore, you can choose a shorter repayment period to reduce interest expenses.

Credit rating: Applying for a loan in exchange usually requires a credit rating, and the loan and interest rates are determined based on the results of the assessment. Getting a credit rating requires efforts to increase your credit score.

Extra costs: You must consider costs that are different from the expected fees of the new loan product. When applying for a loan-to-value loan, you will incur additional fees, a penalty due from the previous loan amount, and various insurance premiums.

Solidarity Guarantor: If you have a low chance of insolvency or a low credit rating, you can also apply for a loan with a guarantor to get a better interest rate. However, if it is difficult to have a family friend or acquaintance you can trust enough to provide a guarantor, it is difficult to choose.

Loan limit: Due to differences in loan products, individual loan limits vary, so you should check the amount of loans available before signing the contract to avoid overdoing it.

Calculate total assets: It is recommended to check the total assets within the loan limit if possible. Comprehensive comparison of loan amount, loan interest, loan range, and more can help you create an efficient loan-to-value plan.


How to Smartly Compare Loan

Using Internet Comparison Sites: There are various sites on the Internet that show loan interest rates by comparing them. These sites allow you to compare loan conditions, such as interest rate information on loan products from several banks at a glance. This makes it easy to find banks with low loan rates.

Look up loan product information on the bank’s website: Each bank’s website provides information on loan products. The loan interest rate, loan limit, and loan period vary by bank, so check the information by referring to the websites of various banks.
Visit the bank for consultation: It’s also a good idea to visit the bank in person for consultation on loan products. You can talk with bank staff about repayment of principal and interest, loan terms, and compare loan rates to find out which banks offer the most favorable terms.

Using Securities Companies or Financial Counselors: Securities companies and financial counseling companies also provide services that compare loan products. These companies comprehensively compare loan products from banks as well as various financial institutions to recommend the best loan conditions to customers.

Utilizing central bank control data: The Bank of Korea manages loan interest rate information from all financial institutions nationwide. You can refer to the central bank’s website to find out the trend of loan interest rates and each bank’s loan interest rates.

When comparing bank lending rates, you should not only look at interest rates, but also comprehensively consider various variables such as loan conditions, guarantee fees, interest rate volatility, and service quality. However, the most important thing is to choose a loan product that fits your situation and goal. You should select the best bank and loan product based on this by checking the amount of loan available, loan period, and interest rate according to your surroundings.

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