First, you should know that this option applies to the vast majority of existing loans, including:
Credit Consolidation for the Best Rate?
The organization that facilitates the buyout will initially add up the amount of your consumer credits. This allows them to assess the total you owe to your current creditors. They also evaluate your current expenses, meaning the predictable monthly expenses.
The financial institution then subtracts repayments and expenses from your income. This calculation reveals your disposable income and, more importantly, your debt ratio. It is noted that all your recurring expenses and income are considered in this calculation.
Once your financial situation is clearly defined, the bank can offer you an appropriate proposal. This new creditor also considers your family and professional situation to evaluate suitable rates and the monthly payment that best fits you.
Note that both traditional and online banks compete to offer attractive credit consolidations. Therefore, do not rush in choosing your future creditor. Instead, conduct simulations and comparisons that will guide you toward the offers that meet your needs and constraints.
After signing your new contract, the buyout institution clears all consolidated debts. Former creditors then provide a certificate releasing you from any obligations towards them. From that point on, the bank that bought your credits oversees your loan file, serving as your sole point of contact.
How to Proceed with Credit Consolidation for the Best Rate?
The ideal choice depends on your profile and what motivates you to consolidate your current loans. For this, you need to establish a financial assessment, as explained above. If the buyout institution does not perform this assessment or neglects certain information, walk away.
Also note that the new contract must be insured. Inquire about the options offered by the bank and independent insurers because you are free to choose the insurer that suits you. In the medium to long term, you could save several thousand euros by carefully comparing offers.
Start with online simulations to get a clear idea of the possibilities available to you. Then, contact the institutions whose proposals seem most relevant. Do not rush into signing a contract. Learn about the terms of early repayments.
What about the rates and monthly payments that will be in effect over the duration of the new loan? How much in savings will you actually achieve after reducing your installments?
The remaining repayment duration of each installment loan is as important as the amount of current credits since these details will confirm whether consolidating your loans is truly advisable.
