Debt consolidation is a type of financing that allows you to combine multiple loans into one. So with this solution you can pay off the loans in progress and combine them into a single lighter monthly installment, taking advantage of competitive interest rates and review the amortization plan, extending it.
The number of obtainable changes according to the customer’s profile and the characteristics of the loan requested. The money must be used to pay off existing debts and the remaining portion as additional liquidity.
Check the best debt consolidation companies
The advantages of a debt consolidation operation via the best debt consolidation companies are manifold, such as:
- repay a single monthly installment, usually for a lower amount;
- request additional liquidity to meet expenses;
- you can choose a different interest rate or extend the expiration of the loan installments up to a maximum of 120 months.
In general, the granting of a debt consolidation loan is not tied to the presence of collateral.
However, in order to limit the risk of insolvency, banks may propose to the applicant a contract that provides for the change of installments, which guarantees a part of the entire amount disbursed.
However, the most common form of guarantee is the signature of a co-obligee or a third-party guarantor, the famous guarantor. He will have to pay for the positive outcome of the operation.
Usually, it is a common request especially in the presence of particular customers, such as an applicant with recent working seniority or with some payment problems with the loans that they want to consolidate.
In any case, any request for guarantees is at the discretion of the individual credit institution.
Debt Consolidation Loans: the evaluation criteria
Although each bank needs specific requirements, the basic assessment criteria for debt consolidation loans are usually as follows:
- risk policies, each institution applies a risk policy in the evaluation of requests, referring to the statistical data it possesses (the so-called credit scoring);
- income level, the acceptance of the applications is also subject to the evaluation of the customer’s income level and the relationship between the latter and the repayment installment;
- creditworthiness, the banks estimate the level of risk associated with each request, on the basis of the credit reports provided by the Risk Centers. In the event that the applicant’s credit history has some flaws, such as delays in repayments or outstanding, the probability of acceptance is lower.
Debt Consolidation Loans with the assignment of the fifth
In the event that the applicant is a civil servant, a state employee, or a pensioner, it is possible to request a debt consolidation with the assignment of a fifth of the salary.
By taking advantage of this opportunity to merge the various debts, it is possible to obtain higher amounts and a longer duration for the payment of the installments.
Taking advantage of the assignment of one-fifth of the salary or pension is quite useful even if the creditworthiness of the customer is not excellent, since, by offering certain guarantees, the bank will be more incentivized to grant the loan.
Debt Consolidation Loans: Best Bank and Cream Bank proposals
Customers who have too many loans in progress and want to group them all in one convenient installment can apply to Astro Finance, the loan offered by Best Bank. Here are the main advantages:
- repayment of ongoing loans, with Astro Finance and additional liquidity;
- possibility to extend the duration up to 120 months;
- fixed and lower installments and rates, inclusive of all expenses;
- no mortgage collateral required;
- evaluation of requests from those who have had bankruptcies;
- free service to extinguish previous loans.
The financial Agos offers loans for debt consolidation, with which, instead of many loans, it is possible to combine them all in a single monthly installment.
It also offers:
- single rate (TAN) and blocked for the duration of the loan;
- one deadline to keep in mind, and opting for a refund with automatic debit in the current account (SDD) it will not be necessary to remember to go and pay the postal bills;
- there is only one financial relationship, serious and reliable;
- repayment times can be longer, even in 120 months, to reduce the amount of the installment;
- request an additional sum.