How to clarify your money needs – Guide to the consolidated loan amount


Finding the right money needs can be difficult. Because it may well be that the new bike costs DKK 10,000 or that the construction offer for the renovation in the home is estimated at DKK 30,000. But what if you are going on holiday and do not know the exact price? Otherwise, if you have 5,000 in the account, should that amount be set off?

There are a lot of questions and considerations one should make to find the right consolidated loan amount. In this article we will guide you on the road and make our best advice. It is especially important that you know the answer to these two questions.

Should the amount of the account be included?

The first question many ask is whether the existing amount in the account should be included. It can be really hard to know, because one cannot even clear the account, as ongoing and fixed costs must still be covered.

The boring, but only real answer is that you must have made a budget if you don’t already have it. It does not have to be harder than that, but it will give you an insight into your fixed and current expenses. You need to know how much money you need for spending before you know how much of the money in the account is actually available.

Example : If there are 13,000 kroner in the account and you at 11,000 per month including everything, it will be risky to take out this money. Conversely, if you have air in the economy, with eg. DKK 25,000 in the account. Here you can by yourself be cautious, easily offset 10,000 in your money requirement, without pushing your economy unnecessarily.

All in all, there is no general answer, but get a budget so that you can more easily assess how much of the money you can deposit in consolidated loan amounts.

Do you know the exact price?

The next question is whether you know the exact price of what you want to fund. If it’s a journey, you can only know it roughly. If it is a fixed object, such as a new bike, computer etc. then it is somewhat easier to handle.

 The exact price will also help you clarify your money needs and how much a consolidated loan you need to apply for. In case you do not know the price, you should start by getting it clear. If you want to buy a physical object, you must, for example, have selected the model you want. A computer can cost anywhere from 5,000 to 15,000 kroner. Similarly with a used car, flat screen TV and whatever else you might want.

Then find out the exact price as the next, as it will set the framework for your money needs. Once you know this, you can assess whether your current account amount should be offset or whether the consolidated loan will finance the entire purchase.

But keep in mind that you should never borrow more than out needs, as it will only incur higher costs. Here it makes a noticeable difference whether you are seeking a consolidated loan of 10000 or a consolidated loan of 20000 kroner.

Consolidated loan declined? See what you can do


What is a payday loan?

A financial payday loan consists of a contract between the bank and the customer in which the institution grants a certain amount of money to the consumer to purchase goods or services.

In this way, the client undertakes to pay the payday loan back within a certain time and at interest rates defined by the bank.

However, in granting a consolidated payday loan, the bank is running a risk that translates into the likelihood of not recovering the money it lent. Thus, the higher the risk of the operation, the higher the interest rates applied, which will make the final cost of the consolidated loan higher.

At the limit, if the financial institution’s experts consider that the risk of the transaction is too high, your loan application may be refused.

If you have been refused loan, we advise you to investigate and understand why the financial institution has made such a decision.

Once you’ve uncovered the reason (or reasons) for your declined loan application, it’s time to get down to work and improve your reputation with the bank to get approved for funding.

What to do after a declined loan application?

1. Review your bank records and confirm if there are any errors

Banks investigate your financial history to see if you are usually compliant with your payments. A declined loan request can be derived from past defaults that are recorded in your bank history. To check your records you can access the loan Responsibility Center (CRC).

This information system is available online, to any citizen, on the website of the Bank of Portugal and allows you to have access to your banking history. It contains positive information (regular) and negative (default, if any) in relation to its loan operations.

This information may also be requested in person at the Banco de Portugal service counters.

It is not your responsibility to make changes if you find an error, but you should immediately contact the loan institution because it is the one that has the power to rectify or change your registration.

2. Look for solutions to avoid over-indebtedness

If you are in a situation where you feel that you are putting pressure on your effort rate and are having difficulty paying your benefits at the end of the month, or if you are already in arrears , it is best to seek help. We advise, first of all, to speak with your bank and explain the situation.

The bank can offer you several ways to avoid debt, in particular through the PERSI (Extrajudicial Procedure for Regularization of Situations of Default). This process is based on an agreement between the bank and the client where proposals for regularizing loan are submitted.

One of the hypotheses normally presented is the renegotiation of loan where the possibility of reducing the benefit is offered by extending the term of payment. However, interest rates will be higher, so the final cost of loan will increase. Another solution, if I have more than one payday loan at a time, goes through the consolidation of loans .

This strategy allows you to put all your debts together in a single installment, substantially reducing the monthly amount to be paid, and can also contribute to the reduction of interest rates.

Put the loans together into one

If you begin to feel that your effort rate is being over-pressured, you may consider requesting a transfer of your loan to another institution. This solution is suitable, as a rule, to mortgage payday loans in order to look for lower spread offers to facilitate the payment of installments.

In extreme cases of over-indebtedness you have the possibility of requesting personal insolvency . This is the last step if you can not settle your debts.

There are also support entities for indebted families and individuals such as APOIARE, the Over-Indebtedness Support Office (GAS) and the Bank of Portugal’s Indebted Customer Support Network (RACE).

3. Do not make other loan requests           

If your loan application was rejected by the first financial institution you resorted to, it is most likely that the financial experts who analyzed your application identified that it represented risks to the bank. It will not be worthwhile to continue trying other institutions until you see the causes of the first loan rejection resolved.

4. Look for ways to improve your reputation with the bank.

“Past is past” and you can always try to improve your less positive track record with the bank. For example, if you have improved your professional conditions and have been awarded an effective contract for others, giving you more financial stability, you can (and should) present the bank with a guarantee, as it is a way of proving that your effort rate will be reduced . Other collateral, such as your home mortgage or a guarantor’s submission, also represent capital gains to avoid a declined loan application.

5. Confirm your bank report again

After following the steps above that you find relevant to your loan refusal status, re-confirm your bank report within a potential period of up to three months to make sure that all information has been rectified and changed. If everything is in order, you can proceed to the new loan application.