For the financial institution that provides the credit consolidation is to redeem all the debts of its customers to be their sole creditor. Commonly called “buy credit” credit consolidation gives mainly a fiscal space that reduces the principal debt repayment goal. The management of these becomes less burdensome for the borrower.
The types of debt consolidation loan
It can generally be classified into two categories deals offered by specializing in the acquisition of credit institutions: consolidation consumer credit and redemption of mortgages. The only difference between these two categories is in the very purpose of the loans. From a general point of view, we can say that anything that does not touch the real estate can be considered as a product or a “consumable” service in the short or medium term. In fact, everyone can use the consolidation credit.
The possibilities offered by the combination of consumer debt
Whatever the offer and whatever institution that offers this service, consumer credit consolidation is a practice that allows the borrower to have:
– A single payment rate,
– An interest rate renegotiated
– A new staggering debts.
Reduced monthly payment
The fact of not having to pay one creditor facilitates the management of monthly payment. The combination of consumer credit makes it possible to not have to worry about in the end only one monthly payment. Moreover, the monthly payment can be negotiated so that it is less than the sum total of the old pre-consolidation monthly. Not only the person in debt is no longer forced to pay several creditors at a time, but in addition, it has the ability to pay less, since the reduction can range from 20% to 60%. This can cause an increase in its purchasing power.
Interest rates reduced after loan consolidation interest rates
Just as the monthly payment, the interest rate may be renegotiated during a credit consolidation. It is indeed likely that the various loans taken do not have the same rates. Meanwhile, the pressure on the borrower is greatly reduced. The purchase of credit must avert encounter difficulties in paying monthly installments to the point of losing certain serenity. In return, the duration of payment of the debt may be extended.