The intrinsic advantage in deferring a payment, even if a significant amount, in a certain number of installments, allows anyone to face significant expenses. But it also hides various pitfalls, including the ease with which the payment of the different installments can escape and the excessive increase in ‘debt’. A problem that can afflict both companies called to adopt debt restructuring programs, and individuals for whom specific debt or loan consolidation loans exist.
Christian debt consolidation loan companies can help you
Finding yourself in a situation of excessive debt exposure is far from difficult or impossible, even for those who are more prudent in nature. In fact, even if the installments, taken individually, are of little account, with their accumulation they risk engulfing the entire income of the debtor. It is even trivial to argue that before starting a new loan you have to evaluate your previous debt exposure and to do so you can rely on tools, available for free online. If the situation reaches a critical point, then the best solution is almost always that of debt consolidation. The meaning is contained in the name itself: it is a specific loan that plans to consolidate multiple loans into a single one.
The advantages of debt consolidation: a useful tool if used well
When you apply for a loan or debt consolidation loan, you essentially agree to extend your debt status, so as to make the only installment to be repaid even more easily sustainable, an aspect that you must be aware of. Furthermore, it is necessary to avoid increasing the debt amount by asking for new liquidity, unless it is strictly necessary.
By carefully choosing the type of consolidation loan, you can also mediate the increase in the installments that will be repaid. By opting for a lower Tan than the average of the loans already in progress, you can, in fact, avoid choosing too many installments, so as not to lose the economic advantage of a lower outlay for the interest expense that will accrue.
How debt consolidation works: simple but not always a fast procedure
It happens that one thinks of the request for a loan (or mortgage) for debt consolidation when the situation has become critical or almost critical. In these cases, you risk not being able to make it with the times, in fact, even if the bank that is willing to grant the loan, does it generally within a few days, you have to consider the time it takes for the banks and financial companies with which you have turned on loans to be paid off (and replaced) to draft and send them.
In fact, a basic condition for this loan is precisely the extinction of the existing loans and their replacement with the only remaining loan (which is the debt consolidation loan), an operation that is carried out by the succeeding bank. From a practical point of view, however, those who want to obtain a debt consolidation have no choice but to prove the existence and consistency of the residual debts to be repaid.
The process that follows may suggest that debt consolidation is a sort of subrogation of loans, but both in form and in substance it is not so. With the debt consolidation, in fact, a reorganization and a replacement with new and different contracts with respect to the original one are carried out, also the “motivation” (finalized or personal) which led to the first request, ceases to exist.
Who is debt consolidation suitable for?
This type of financing has been designed for all those who have more than one installment and find it difficult to follow the timing or the repayment amounts. It is, in fact, undeniable that having to meet a single deadline in itself represents an advantage that should not be underestimated, even for more serene planning of spending as a whole. It can also be indicated to those who have taken out loans with higher rates, and in this way can replace them with cheaper products, without risking that the request will be rejected due to the excessive weight of the already existing debts.
Is it always worthwhile?
When you decide to take advantage of this specific form of a loan, you are not obliged to actually repay all existing loans. Those who are close to the deadline should be left out, as they would end up paying the interest again, with a negative impact from an economic point of view.
Transfer of the fifth or specific loan to consolidate?
The banks usually provide all specific products to carry out the consolidation of the loans, while a good number of financial companies (such as Agos and Compass) adapt for this purpose other types of loans such as the assignment of a fifth of the salary or pension. Do not confuse the assignment of the fifth with a debt consolidation loan. However, given the particular nature of the “disposals”, which do not consider the debt exposure as the main element in the evaluation, in fact, they can also be used for the purpose of consolidating existing loans.