What to remember
- A lower payment may come from a much longer term.
- Compare costs remaining from today onward.
- Confirm that the old debts have been settled.
1. List what you owe today
For each loan or card, record the balance, currency, monthly payment, remaining months and exact settlement amount. A card needs a repayment plan; today’s minimum does not reveal the lifetime total.
Debt consolidation means using a new loan to repay several debts. A bank must confirm whether it finances this purpose and which debts qualify.
2. Compare costs from today
For the current plan, add remaining payments. For the new plan, add all repayments and switching costs not already included: fees, settlement charges, insurance and security costs where required.
Do not count a cost twice if it is financed within the new loan. Past payments cannot be changed by today’s decision and are excluded from future savings.
3. A smaller payment can mean a larger total
Hypothetical example: the existing plan has 24 payments of ALL 15,000 remaining, totalling ALL 360,000. A new offer has 48 payments of ALL 8,000 and ALL 5,000 of separately paid switching costs, totalling ALL 389,000.
The monthly payment falls by ALL 7,000, but the total rises by ALL 29,000 and debt lasts two extra years. Assume unchanged payments, settlement of the same debts and no extra cash borrowed. This is an illustration, not a bank offer.
4. Check security and currency
If the new loan requires your home as security, the decision also puts the property at stake. Do not judge it only by a lower rate. Ask exactly which obligations the security covers and what happens on non-payment.
When replacing lek debts with a euro loan, also examine a less favourable exchange-rate scenario. A lower payment today may require more lek later.
5. If repayments are already difficult
Contact the bank early with an income, spending and debt summary and ask to discuss an affordable plan. The Bank of Albania’s restructuring guide is advisory; it does not guarantee approval.
Follow existing obligations until a change is confirmed in writing. After repaying a card, check whether the limit remains open: using it again creates new debt alongside the new loan.
Questions to take to the bank
Use this list when requesting your written offer.
- What is the settlement amount for each debt on the payment date?
- Which debts will be closed and who will pay them?
- What is the total payable from today under each plan?
- Will property now secure debts that were previously unsecured?
- How can I close or reduce the repaid card limit if I no longer need it?
Frequently asked questions
Are old debts cleared as soon as the new loan is approved?
No. Approval is not settlement. Obtain repayment confirmations and separately confirm closure of accounts or limits you no longer want.
Does this solve spending more than I earn?
Not by itself. You need a budget that covers essentials and the new payment. Discuss the difficulty with the bank; new borrowing may postpone the problem and increase costs.
Sources and examples
Bank of Albania: advisory restructuring guidance, not guaranteed approval ↗
Links beside specific explanations identify their official sources. Worked examples are educational assumptions, not bank offers. The bank confirms the terms for your situation.
Further reading in English
These guides offer additional explanations from the UK and US. Their local laws, products and eligibility tools may not apply in Albania. Albanian requirements are linked to local sources above.