How To Consolidate Your Payday Loans

Debt consolidation: definition and purpose

If you want to reduce your monthly payments on current loans and possibly get additional liquidity, you can use a debt consolidation loan. This instrument is in fact a solution that allows all loans to be extinguished and combined into a lighter monthly payment, thanks to more competitive interest rates and the possibility of extending the duration of the transaction. The maximum amount obtainable varies according to the client’s profile and the characteristics of the loan requested, which is used to pay off existing debts and, if desired, may have a remaining portion that is assigned as additional liquidity.

In addition to the possibility of making a free estimate for debt consolidation, you can also consult the daily updated table with the most affordable consolidation loans of the day selected from the various proposals of the lenders linked to free comparison services offered by online companies specializing in comparing loaners.

Debt consolidation is a type of loan that brings together all the installments that the applicant has to pay, in a single monthly payment, greatly simplifying the credit experience. The Debt Consolidation can be carried out exclusively by authorized financial institutions, which present all the safeguards required by law and the maximum transparency of the plan signed with the debtor.

Thanks to the Debt Consolidation loan, the interest on the active loans will be based on a single monthly installment suited to your financial situation; becoming a complete and sustainable solution and eliminating the danger of excessive debt.

How it works?

Usually the Debt Consolidation “spreads” the amounts due from the other loans over a longer period of time, giving the possibility of having a lower monthly payment. Once the application has been submitted, the concessionaire evaluates various parameters relating to the financial situation and the financial soundness of the applicant, reserving the right to decide whether to approve or reject it, therefore we advise you to simulate the loan for debt consolidation.

This particular form of “centralized financing” can be requested both by legal persons (companies, associations, etc.) and by natural persons and, in theory, is open to all categories of workers who demonstrate, income in hand, to be able to support the signed repayment plan.

Loan consolidation can usually be accompanied by optional customizable insurance, covering negative events such as job loss, the death of a spouse or disability. Thus the applicant gets a financial security on the obtained loan.

How to consolidate debts as a bad credit borrower

The question that many people ask is: can debt consolidation be achieved if one has already entered the black list of the insolvent? The answer is yes. Moreover, if you decide to consolidate your debts, you can be canceled from the blacklist. Let’s see how.

First of all, it is good to know that the report as a “bad payer” is sent by the credit institution (s) you owe to Credit Rate Agencies – CRAs – which are mostly private companies that keep a database updated with the names and data of bad payers.

Financial institutions, financial operators and credit brokers, which verify the solvency of a new customer, have the right to access this database. If the verification on a name gets a positive response, it means that that person was insolvent and consequently, will have more difficulty opening, for example, a new bank account or requesting a new loan.

It must also be said that, if the situation relating to the non-payment of one or more loans is not serious, that is, if the payment of a couple of installments is missing, the level of behavioral assessment will be better than those subjects with a higher level of insolvency. In some way, a sort of “report card” of the bad payer must be taken into account, which will eventually lead to greater or lesser chances of being able to access the debt consolidation practice.

There is no doubt that the general advice to be able to consolidate one’s debt situation is to pay as much as possible past due installments so as to slightly mitigate the overall debt situation and also, demonstrate good will that will not go unnoticed by those who decide the fate of your economic and debt situation. Beyond this, it should not be forgotten that any banking institution or financial agency will evaluate the guarantees that you can offer as a caution for the financing that must be provided. If you are not an owner of any real estate or other assets useful to guarantee your credit request, you can propose, if you have any, people who guarantee for you with their real estate or with a commercial or professional activity that obviously has an active bank account.

Once the global situation has been assessed, and even a summary of the family’s basic monthly expenses to determine what remains at the end of each month to be able to pay the monthly installment, the bank will decide whether or not to grant the solution to consolidate the situation debtor to the “bad payer”. That does not necessarily happen, it depends on the financial institute, sometimes even on the branch manager who can decide whether or not to trust a debtor. In such a case, don’t be alarmed. Contact other financial institutions and agencies, until you find the one that will take charge of your file and will finally allow you to lighten the burden of installments on your shoulders.

There are obviously some rules for being able to access debt consolidation for bad payers. They are:

  • be between 18 and 86 years old
  • be permanent employees from a minimum of 4 to a maximum of 24 months, according to credit institutions
  • be a fixed-term employee for at least 4 months and do not have too large a debt
  • to be retired

The financial institution will offer you a series of solutions. In the event that you are a worker with a contract in accordance with the law and for an indefinite period or a pensioner, the general rule provides that you can pay through the institution of the assignment of the fifth. This means that, on a monthly basis, one fifth of your salary or pension will be withdrawn at the source to pay the monthly installment of the single debt that you have contracted.

If you do not have a pay slip and you do not have a pension, you can ask what is called an unsecured loan. Normally it is a solution offered to self-employed or unemployed, but it requires the debtor to take responsibility for the closure of the installment debts and makes it more difficult for the applicant to be granted.

Once you have finished paying the installments agreed with the consolidation practice, you can obtain the removal of your name from the CRAs’ database and become a good payer again, provided that you still need to contract other debts to be paid by installments.