Debt consolidation loan is a form of personal loan that you can use if you have more than one loan at the same time (for example, home loan, car loan, financing for the purchase of goods and services…) and you want to group all the loans you have in progress in order to have a single monthly payment, possibly even for a smaller amount.
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Debt consolidation is also accessible by anyone who has been reported as a bad payer, has been protested or has been subjected to foreclosures. The accumulation of multiple loans over time increases the difficulty in dealing with individual payments on time and considerably increases the risk of skipping one or more installments, turning the debtor into a bad payer.
In the event of non-payment, the debtor is first of all required to pay the additional payment relating to default interest. If your name is entered in the register of bad payers, if, in the future, they could create great difficulties in obtaining new loans. Debt consolidation is a viable route for those who are already known as bad payers, and those who have scented danger and want to prevent or prevent this possibility.
Loan Consolidation Debts, A new loan that extinguishes all your loans and has a single installment!
These are the effects of a debt consolidation request:
- the residual debt is fixed, thus determining the extinction of all the loans in progress;
- at the same time, a new, unique, personal loan contract or salary-backed loan is created, which includes the sum of the loans previously subscribed.
The advantages of debt consolidation loan
- pay one installment per month;
- you have only one deadline to keep in mind;
- you relate to a single creditor;
- you have a more sustainable commitment because you can decide to extend the duration of the loan and, consequently, reduce the amount of the monthly payment;
- additional liquidity, whose repayment will be included in the only monthly installment to be paid.
In addition, over time, you can also decide to pay off the loan for debt consolidation in advance, saving considerable interest.
Who can access it?
The following categories can apply for debt consolidation:
- public, state and private employees;
- pensioners (in this case, the maximum age limit for admission to funding is established independently by each institution. The most prudent set this limit at 75, others raise it above 85).
- non-EU citizens with a valid residence permit.
Requirements to get a debt consolidation
The requirements necessary to obtain this type of loan are:
- the age of majority;
- the demonstration of having a regular income for at least six months, certifiable by a document (payslip or other).
- No special guarantees are required, nor is there a mortgage obligation.
However, it is possible that the applicant is asked to sign a third person as a guarantor, especially in the event that a problem has occurred with the loans in progress.
A fundamental condition is the demonstration of one’s creditworthiness, that is, the never having been involved in situations of default or protest.
Documentation to be presented
It is different depending on your job position. Below is a summary of the various types of workers:
- employees employed on permanent employment contracts: a copy of the payslip and / or copy of the CUD;
- self-employed: Unimonel model;
- pensioners: pension slip.
- In addition to the documentation on the income situation, an identity document and the tax identification number are always requested from the debtor.
The documentation relating to the loans in progress is of fundamental importance. In order to be able to successfully conclude the debt consolidation loan operation, it is, in fact, essential that the intermediary has all the information needed to proceed with the early repayment of the debts.