Do you have multiple ongoing loans? Let’s say you have taken out auto financing for a purchase of €25,000; you also have an installment loan of €10,000 with which you did some renovations in your house; finally, you have contracted a revolving credit (a credit line) of €3,000 in a large store to buy high-tech products (tablets, computers, printers, smartphones, iPhones, etc.).
You realize today that the accumulation of your three separate monthly payments is starting to strain your monthly budget and that the ends of the month are becoming difficult.
Rather than dragging on with monthly repayment difficulties, it might be time to think about finding a solution: consolidating your three loans into a single loan can certainly reduce your new monthly premium. A few words of explanation.
What is credit consolidation?
Credit consolidation aims to perform a credit grouping. In the example mentioned below, you have three separate monthly payments to make. By consolidating the three outstanding loan balances, you will only have one loan with a significantly lower monthly payment.
What are the benefits?
Firstly, from an administrative point of view, you no longer have to think about paying your three premiums each month to different interlocutors. With credit consolidation, you only have one ongoing loan and one interlocutor.
Secondly, it is obvious that the accumulation of three separate premiums resulted in much higher repayments than if you only had one ongoing loan, even if the amount of this loan is higher.
When should you proceed with the consolidation of your loans?
As soon as you have more than one ongoing loan, it can become interesting to proceed with a credit consolidation. This is a possibility that you should consider with your broker.
Obstacle to credit consolidation
It will be difficult to proceed with a credit consolidation if you are listed with the National Bank of Belgium, meaning if your file has fallen into litigation.
Solution?
If you own a property that is free of charges, it can always be considered to take out a homeowner loan and take a new mortgage registration on your property.
