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Before combining your credits, you must ensure that the financial situation is suitable for this solution. Indeed, credit consolidation is a solution that makes it possible to reduce the monthly payments of credit that one has to repay each month. You still have to be eligible and choose the right product according to your situation. The offer that allows you to group your credits together is often referred to as credit repurchase.
Grouping your credits is not intended to save money but to lighten the monthly loan payments that you have to repay every month when you have too much debt. What lowers the cost of a loan is renegotiating a loan. It is very much in vogue at present for mortgage loans because the rates offered by the banks are very low at the moment.
When you decide to combine your credits, all debts are taken up in a single credit whose repayment duration is sufficiently extended to obtain a bearable monthly payment. The longer the repayment period of a loan, the more expensive it is. In the context of credit consolidation, in the end, the borrower will pay more agios than if he had kept all his credits in the state.
This is the reason why it is essential to compare the offers before choosing to combine your credits with this or that body. We have therefore developed a credit comparator which makes it possible to obtain an evaluation without a commitment from several organizations.
Combining your credits allows you to get out of a bad patch?
The purpose of pooling credits is clearly to rebalance a budget saturated by monthly repayments. As we have seen, consolidating your credits allows you to accumulate all your debts in a single new credit, the duration of which will be sufficiently extended to obtain a monthly payment compatible with your income.
Different types of credit consolidation
There are 2 main situations which involve grouping your credits into specific products:
- Too much consumer credit only
- Having too much consumer credit AND a mortgage
We can also combine our credits if we have a single loan and another debt that we can justify. If there is only one credit that is too difficult to repay, you must approach the lender so that it extends the repayment period.
Consolidate your credits: before / after
It is possible to lower your monthly payments up to -60% by combining your credits, but this is probably the most extreme example. The average debt of a loan buy-back is 30,000 USD. Here is the typical debt profile:
- car loan debt: 15,000 USD; monthly payment: 340 USD
- personal loan debt: 10,000 USD; monthly payment: 225 USD
- revolving credit debt (x2): 5,000 USD: monthly payment: 200 USD
A total of 765 USD to be reimbursed every month. By choosing to combine your credits over 84 months, it will be possible to obtain a monthly payment of the order of 450 USD. Or a drop of more than 40%.
If ever the solutions studied for a credit grouping do not succeed, it is necessary to turn to the Beasley. Indeed, whether or not one has reached the stage of over-indebtedness, the worst in this situation is to do nothing. Filing an over-indebtedness file can be a solution to get back on the water.