Payday loan debt consolidation companies -Get loan debt help

Get loan debt help

Debt consolidation consists of a financial transaction involving a debtor and a lending institution like De Debt online. It does not require any intervention on the part of the court contrary to the bankruptcy and the consumer proposal. It allows the debtor to repay all of his debts and not a single part of them. Unlike the other two procedures mentioned above, it does not protect the debtor from creditors unless the debtor repays the consolidation loan in accordance with the terms of the loan agreement.

The objectives of debt consolidation

The objectives of debt consolidation

Certainly, the primary purpose of debt consolidation is to pay all your debts. However, this non-judicial financial transaction, unlike bankruptcy and the consumer proposal, also contributes to saving the debtor by pooling all its debts in a global loan, less costly in interest. In fact, global lending often includes loans of all kinds, such as credit cards, personal loans, student loans, taxes, and even second-chance loans in certain cases with higher interest costs. Moreover, given the reduction in the interest rate, the debtor pays all of his debts much more quickly. Finally, debt consolidation also allows the debtor to avoid payment overdrafts, because it only has a monthly payment to make.

A solution that can not be enjoyed by all debtors

Despite all the attractions of debt consolidation, it is not automatically granted to everyone. Indeed, the borrower with a bad credit, can not avail of this option since financial institutions rely on the credit rating to determine eligibility for a loan that it is consolidation or not. The borrower must first find a financial institution that will accept a loan. And even with a good credit rating, it is possible that the consolidation loan may be rejected because of the debt ratio and / or professional status. There is nothing to prevent the debtor from applying to another lender, but you should know that each debt consolidation loan request generates a credit rating, which will lower the rating and, with it, will decrease. the chances of getting financing elsewhere. Financial institutions are not fooled and know that when a borrower makes close funding requests, there is a good chance that the borrower will be squeezed. This is why it is better to limit attempts to three requests. Beyond three refusals, it is better to opt for another solution than debt consolidation.

Leave a Reply

Your email address will not be published. Required fields are marked *