Conducting a credit consolidation is a frequently used method to ease monthly payments. In Belgium, it is primarily used to help borrowers avoid banking restrictions that could severely impact them. What exactly are the consequences of this situation? The prohibition on using bank cards and checkbooks. The inability to request traditional credits such as revolving credits or personal loans without documentation. However, these are not the only reasons for opting for credit consolidation. So, why opt for credit consolidation?
Conducting Credit Consolidation Increases Cash Flow for New Projects
While credit consolidation is usually used to pay off accumulating debts, it is not uncommon for people to consolidate their credit to finance projects. It is common among new households wanting to, for instance, expand or beautify their homes by purchasing new furniture or doing renovations.
It must be acknowledged that this process is used to prevent increasing monthly payments while advancing one’s projects.
Reorganize Finances with a Single Monthly Payment
So, for one’s household, why conduct a credit consolidation? In a household, credit consolidation can have two impacts.
The first is the ability to have a clear overview of one’s finances, allowing for better monitoring. Secondly, it provides an opportunity to avoid frequent over-indebtedness. Credit consolidation allows households with reasonable and balanced incomes to reorganize their monthly payments into one. This results in a single, visible monthly payment on bank statements.
Thus, the reason for opting for credit consolidation is not necessarily about paying off debt. It can also be a way to prepare for the future or manage one’s budget effectively.
