What is debt consolidation ?

Debt consolidation is a kind of loan that groups together all the installments that the applicant has to pay, in a single monthly solution by simplifying the credit experience. Debt consolidation can only be carried out by authorized financial institutions, which present all the protection guarantees required by law and the maximum transparency of the plan signed with the debtor. Thanks to the loan for debt consolidation, the interest on the loan assets will be combined in a single monthly installment adapted to your balance sheet. This method becomes a complete and sustainable solution because it eliminates the risk of excessive debt.

How is it carried out ?

Usually the debt consolidation covers the amounts owed by other loans in a longer time interval, giving the possibility of having a lower monthly payment. Once the application has been submitted, the concessionaire shall assess various parameters relating to the applicant’s financial position and strength, naturally reserving the decision to approve or reject the application. Therefore, OAC recommends carrying out a simulation of the loan for debt consolidation.

This particular form of “centralized financing” may be requested by both legal entities such as companies and associations or individuals. In theory, it is open to all categories of workers who demonstrate that they can support the repayment plan signed.

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

A good way to cut monthly costs :

Grouping your debts in a single loan allows you to manage your budget in a more effective way since the installment groups all the amounts that have been paid, knowing immediately what are the fixed monthly costs and the debit date.

Added to that, consolidation will enable you to get a lower rate than the sum of the previous ones. In fact, through extending the repayment period, the installments of the new loan can be reduced by up to 55%.

What are the advantages ?

There are several advantages reserved for those who choose to join a debt consolidation plan. First, you can get a single monthly payment, often at better economic conditions.

From a practical point of view, there is a greater simplification with a single deadline that is easier to manage. The positive aspects of consolidation, in some cases, are also psychological. Having a single installment brings more peace of mind and less psychological pressure. The debt consolidation must involve at least two loans reducing the total amount of the installment; however, it appears to have a greater impact with three loans.

How can businesses benefit from this method ?

Debt consolidation ensures that small and medium-sized enterprises can regain confidence in their sector by relying on the new availability of resources resulting from the rescheduling of their debts. In fact, short-term debts do not allow companies to have a financial plan that is adequate to their needs. On the contrary, it is possible to go back to planning medium or long-term activities thanks to debt consolidation.

Although this loan system does not definitively resolve the financial problems of the companies, it makes it possible to combine the expenses into a lower installment and possibly to obtain liquidity based on the agreements signed with the bank.

The creditor institution allows firms to overcome their debt emergencies in order to encourage their recovery and expansion by providing adequate financial resources.

Make a transparent and reliable choice with OAC :

When you decide to consolidate your debts, it is always advisable to analyze the proposals of different credit institutions in order to find the most advantageous terms. At OAC, we offer innovative, safe, and convenient solutions. Discover how OAC works and how it can offer such advantageous solutions.