Is Consolidation Loan Profitable?

TOTAL AMOUNT OF CREDIT – maximum amount of all cash not involving credited credit costs, which the lender provides to the consumer under a credit agreement (…) 1.

TOTAL LOAN COST – all costs that the consumer is obliged to incur in connection with the credit agreement, in particular:

(a) interest, fees, commissions, taxes and margins, if known to the creditor, and

b) costs of additional services, in particular insurance, if their incurring is necessary to obtain a loan or to obtain it on the terms offered (…) 2.

APRC – the actual annual interest rate. It is the total cost of credit incurred by the consumer, expressed as a percentage of the total loan amount on an annual basis 3.


CREDIT CAPITAL – this is the amount of the loan that was granted by the bank. Otherwise, it is the amount that we borrow from the bank, ie which indirectly (credit for a computer, fridge) or directly (cash loan) we receive from the bank after taking out a loan.

NOMINAL PERFORMANCE (POTENTIAL INTEREST) ​​- the amount of interest on the loan. It presents the interest rate that is charged to the loan capital. This is the interest rate on the amount that we credit from the bank. It should be remembered that there are loan costs beyond the nominal interest rate.

Interest is not the only cost of the loan!

EXCEPTIONAL CREDIT COSTS – all costs that the consumer incurs in connection with the consumer credit agreement, excluding interest 4.

Apart from the interest costs of the loan:

  • charges,
  • commissions,
  • Insurance.

Only this all adds up to the TOTAL AMOUNT TO PAY BY THE CONSUMER, that is, the sum of the total cost of the loan and the total loan amount 5.



As we wrote above, the loan consists of the loan amount and the cost of the loan (interest and non-interest expenses).

Simply speaking. If we have several loans we bear the costs of several loans separately. By using a consolidation loan, we can combine several loans into one.

First of all, thanks to the consolidation of loans, we can spread the loan repayment for a longer period of time.

Secondly, the installment of the consolidation loan will be lower than the sum of individual installments of several loans separately.

Thanks to this, we will be able to adjust the amount of installments to your current financial capabilities and timely repayment. This will allow us to avoid charging interest on late payments, so we will not generate additional costs.

Thirdly, after the consolidation of loans we will incur the costs of servicing only one consolidated loan.