Credit Consolidation: Breathe New Life into Your Budget!

Credit Consolidation: One Loan at a Reduced Rate!

Did you take out a loan a few months ago to finance an expensive computer? Are you a homeowner with a mortgage? Is your car financed on credit too? Have you started home renovations with a home improvement loan that you are still repaying? Are you drowning in an overwhelming number of different loans and unable to keep track? Are your monthly payments too high compared to your income? What if there was a solution? Discover credit consolidation and breathe again!

No more paying multiple heavy monthly bills: consider credit consolidation.

Credit Consolidation: The How-To

Credit consolidation was formerly known as “credit redemption“. Credit restructuring and credit consolidation are also terms used to refer to credit consolidation.

Credit consolidation emerged in the 1980s. It primarily targets individuals or households in debt distress. It involves closing out the various ongoing loans by settling their capital, then replacing them with a single loan with lower and more manageable monthly payments, payable over a longer period. The goal of credit consolidation? Stop the downward spiral of over-indebtedness.

There are two types of credit consolidation:

• Consumer Credit Consolidation: As the name implies, consumer credit consolidation bundles all your consumer loans, such as an auto loan, personal loan, home improvement loan, vacation loan, student loan, etc.
• Mortgage Consolidation: As the name suggests, mortgage consolidation pertains only to home loans.

Advantages of Credit Consolidation

Let’s explore the benefits of credit consolidation:

• Lower Monthly Payments: The primary benefit of credit consolidation is seeing your payments melt away like snow in the sun. Since the total amount due is spread over a longer period, your monthly payments logically decrease.
• A Single Due Date: No more paying your car loan every 15th, your home improvement loan 10 days earlier, and your vacation loan on the 2nd. With credit consolidation, since you only have a single debt, you only have to worry about one due date.
• One Single Contact: In the same vein, you’ll only deal with one contact person.
• Peaceful Management: A single payment date, one contact person, should make things easier for you. No more drowning in invoices!
• Put a Stop to the Debt Spiral: Thanks to lower monthly payments, you can live more comfortably, without needing to take out new loans to pay off the old ones. Say stop to the debt spiral.
• Increased Purchasing Power: Once again, thanks to these reduced payments, finally enjoy your hard-earned money instead of spending your entire salary repaying debts.
• A Happy Treasury: Credit consolidation also gives you the opportunity to have more liquidity, allowing you to potentially start saving!

New Goals in Sight

Regardless of the loans you have taken out, thanks to this new organization made possible by credit consolidation, your accounts will be balanced again. If credit consolidation allows households in debt distress to keep their heads above water, it also enables them to consider achieving goals once thought unattainable.

The Guide to Credit Consolidation

If you have taken out too many loans, it is possible that your debt ratio is too high. In other words, your income is not enough to cover your debts. You can then consider credit consolidation, regardless of the nature of your different loans.

Consumers turning to loan consolidation are not necessarily impulsive buyers. Any of us may one day face a drop in income that prevents us from honoring our various debts. Loan agencies and banks, as you probably know, do not tolerate any payment delays. In such cases, loan consolidation is an interesting option.

How Credit Consolidation Works

After taking out a car loan, student loan, and maybe even a vacation loan, you find yourself overwhelmed by multiple debts that are impossible to repay given your income. By consolidating these different loans into a single loan, you give yourself the chance to lower your monthly payments while extending the repayment period beyond the initially planned timeframe. Thus, your expenses are extended, allowing you to live decently once more.

Credit consolidation or loan redemption is thus an alternative aimed at reducing your expenses, limiting the accumulation of interest, and keeping the indebtedness problem at bay.

The Benefits of the Process

Undertaking a credit consolidation is a relatively simple procedure. The process offers one single loan and one single contact, providing a fixed monthly payment known beforehand, adapted to your income. Indeed, the monthly payment will be calculated according to your repayment capacity.

From then on, the single contact will handle the credit payments to former lenders when you have only one remaining debt to pay.

Caution: despite lower monthly payments and a more favorable rate, the total cost of the new credit can ultimately be higher.

Online Simulation of Credit Consolidation

Credafin experts will find formulas adapted to your situation and budget. Feel free to try our online simulation tool above. It will give you a glimpse of what can be accomplished.

Give your budget a breath of fresh air: opt for credit consolidation!

Simulate Your Credit Consolidation Online