An application for consolidation of interest is a document that we should submit to the hands of our creditor when we do not deal with the repayment of interest for the debt incurred on our side. Let’s remember to write a letter about debt cancellation yourself. An individual presentation of the problem and arguments will be better taken away. Let us not forget about the conclusion in the application for debt cancellation of the most important information, such as: creditor’s details, assurance of timely repayment of subsequent installments or attachments confirming our request.
Letter of interest consolidation – when should we write it?
When applying for a loan in installments or a bank loan, we incur various costs in connection with granting us additional cash . One of them is interest, i.e. payment for granting us financial obligations (capital interest). Interest can also be charged to us when we are in arrears with payment (penalty interest).
Statutory interest for delay in payment is 7%. on a yearly basis. There is a chance that the debtor will handle their repayment. However, if the interest relates to several large loan installments, we may have a problem with their settlement. In this situation, we can draw up a letter of interest consolidation addressed to our creditor. However, we must bear in mind that the lender is not obliged to accept our letter of interest regarding the debt cancellation. The decision depends on his good will.
How to write a debt cancellation application?
The application for consolidation of interest should contain several basic elements. Belong to them:
- customer-debtor data;
- details of a private creditor, loan company or bank;
- determination of the legal relationship that results in the debt and its interest – for example a loan agreement for 6,000 PLN for 6 months;
- the exact amount of debt and the penalty interest resulting therefrom;
- motivating an application for consolidation of interest – it may be a difficult financial situation, job loss or inability to work;
- ensuring that the remaining installments are repaid in a timely manner or that the repayment terms are negotiated – this shows the good will and willingness of the debtor to cooperate;
- attachments – all documents that confirm the motivation of the application,
request for positive consideration of the application.
Although there are patterns on the Internet for debt cancellation, it is worth drawing up such a document by yourself. Personalizing the application on the basis of important arguments is always better than using a ready-made one.
Application for consolidation of interest did not work – what to do?
When applying for interest consolidation, we must be aware that the creditor does not always cancel the debt. There is no such obligation, even if our creditworthiness is very low . In this situation, there is nothing else we can do to use the help of relatives and collect the necessary amount to pay the debt. We can also use a private loan, which will be granted to us on our terms. However, it is worth remembering that another loan in case of a negative credit history may lead to the creation of a spiral of debt .
Persons who have submitted a letter to the creditor for remission of debt increased as a result of high interest may apply to the Financial Ombudsman. He will thoroughly review our case and tell you if we have a chance to reconsider the application for interest consolidation.