Consolidation loan: It’s quick, simple and stress-free
The consolidation loan at ConsolidationNow ..!! is the solution for all those who, having opened more loans over time, wish to reduce the total weight of the installments by combining them into one which contains all of them and, if possible, also obtain new liquidity in the loan.
A typical example of such a situation is given by those who, by hypothesis, have a loan in progress for the purchase of a car, a personal loan requested in the past and still not completely reimbursed, a second loan for a need that has recently occurred and now needs a small amount of liquidity for a further commitment. Overall, three installments a month to pay and the need for a new loan. The ideal objective, in this case, is to obtain a debt consolidation loan that incorporates the three installments and provides the required liquidity.
The advantages of this type of loan are numerous, let’s try to list the main ones:
– administrative simplification (and first economic advantage), obtained through the possibility of paying a single installment instead of four (as in the initial example); if we consider that only the average cost for each loan is set at € 1.50 per month, it is already there that we will have to save € 5 for each installment which, if they may seem few, is always the first saving!
– savings on interest, ie the debt consolidation loan has greater value when its APR is lower than the APR of the loans it incorporates; this seems obvious, but in reality, as we will see later, it is not. In the usual example at the top of the page, our debtor already has three loans with an APR ranging from 10% to 12%. It is obvious that if the new loan has an APR even of 9.5% (and the same duration) then a second advantage is obtained.
– greater dilution of the debt over time, if we could also have a loan with a larger APR but, thanks to a longer duration, enjoy a lighter and less incisive installment on the family budget. This is one of the major strengths of the debt consolidation loan. If I have a total of 800 euros deriving from 4 loans I can get a consolidation for 600 euros a month extending, always by hypothesis, the total repayment duration by 12-24 months.
– obtaining new liquidity , which can be requested on the basis of the principle of reducing the installment mentioned above: if the overall rate is lowered, it is self-evident that it will probably have the income capacity to obtain a new additional loan and bring back the installment, if not to the level of before, of a few tens of euros less.
– temporary suspension of payments, ie a sort of “breath of air”. Where does this advantage come from? Some debt consolidation loans have the characteristic of being able to postpone the payment of the first installment for periods of even 6 months; in this period you will have the previous debts paid and you will not have to pay anything, allowing us to get back some breath!
The guarantees required for the debt consolidation loan
The guarantees necessary to carry out a consolidation are similar to those presented for individual loans, ie income: it must be possible to demonstrate that they have an income that supports the new “bundled” installment. The principle according to which the same of the single loans are not valid. In fact here the risk if it takes all a single financial and therefore could require additional guarantees that are generally:
– a guarantor, ie a third person co-affiliated in the loan together with the principal debtor
– if possible, a fifth assignment
Procedure for consolidation
The procedure, if bureaucratically can be a bit cumbersome, is not at the conceptual level:
– the first phase, that in which, with the participation of the new financial company as a guide (or even by proxy) the extinction counts of the loans in progress are requested. The extinguishing statement is the document that attests to the amount of the residual debt of a loan, which is not trivially equal to the sum of the installments to be paid but disregards the undue interest and adds any early termination fees
– the second phase, the preliminary investigation itself, in which the installment and duration of the loan are determined and the contract is closed (as long as the customer finds the advantageous proposal!)
– the third phase, the disbursements by the financial company of the amount due to the old financial companies and the new liquidity (if requested) to the customer.