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An application for consolidation of interest is a document that we should submit to the hands of our creditor when we do not deal with the repayment of interest for the debt incurred on our side. Let’s remember to write a letter about debt cancellation yourself. An individual presentation of the problem and arguments will be better taken away. Let us not forget about the conclusion in the application for debt cancellation of the most important information, such as: creditor’s details, assurance of timely repayment of subsequent installments or attachments confirming our request.

Letter of interest consolidation – when should we write it?

When applying for a loan in installments or a bank loan, we incur various costs in connection with granting us additional cash . One of them is interest, i.e. payment for granting us financial obligations (capital interest). Interest can also be charged to us when we are in arrears with payment (penalty interest).

Statutory interest for delay in payment is 7%. on a yearly basis. There is a chance that the debtor will handle their repayment. However, if the interest relates to several large loan installments, we may have a problem with their settlement. In this situation, we can draw up a letter of interest consolidation addressed to our creditor. However, we must bear in mind that the lender is not obliged to accept our letter of interest regarding the debt cancellation. The decision depends on his good will.

How to write a debt cancellation application?

The application for consolidation of interest should contain several basic elements. Belong to them:

• customer-debtor data;
• details of a private creditor, loan company or bank;
• determination of the legal relationship that results in the debt and its interest – for example a loan agreement for 6,000 PLN for 6 months;
• the exact amount of debt and the penalty interest resulting therefrom;
• motivating an application for consolidation of interest – it may be a difficult financial situation, job loss or inability to work;
• ensuring that the remaining installments are repaid in a timely manner or that the repayment terms are negotiated – this shows the good will and willingness of the debtor to cooperate;
• attachments – all documents that confirm the motivation of the application,
  request for positive consideration of the application.

Although there are patterns on the Internet for debt cancellation, it is worth drawing up such a document by yourself. Personalizing the application on the basis of important arguments is always better than using a ready-made one.

Application for consolidation of interest did not work – what to do?

When applying for interest consolidation, we must be aware that the creditor does not always cancel the debt. There is no such obligation, even if our creditworthiness is very low . In this situation, there is nothing else we can do to use the help of relatives and collect the necessary amount to pay the debt. We can also use a private loan, which will be granted to us on our terms. However, it is worth remembering that another loan in case of a negative credit history may lead to the creation of a spiral of debt .

Persons who have submitted a letter to the creditor for remission of debt increased as a result of high interest may apply to the Financial Ombudsman. He will thoroughly review our case and tell you if we have a chance to reconsider the application for interest consolidation.

Purchase of credits

Companies offers you the possibility of grouping several outstanding credits like a real estate loan, a consumer credit or a revolving credit … and possibly a new project. Real estate loans are detailed in the section “The purchase of real estate loans “.

With such a purchase of credits, you manage your budget more simply and thus more efficiently. Indeed, it allows you to benefit from both a single rate and a single interlocutor for all credits but also to pay only one monthly payment, the date, duration and amount are defined according to your needs and your projects. The credit repayment period is between 12 and 84 months (7 years) whereas the loanable amount can vary between € 3,000 and € 60,000. No fees.

This financial product offers you the opportunity to reduce the total amount of your monthly repayments by extending the repayment period. This is a viable solution against overindebtedness.

 Minimum amount borrowed: € 3,000
 Maximum amount borrowed: € 60,000
 Minimum credit period: 12 months
 Maximum credit duration: 84 months
 Booking fees: Free

Purchase of real estate loans

The purchase of real estate credit allows homeowners to consolidate all their credits and to take advantage of the many benefits provided by the groupings of credits: lower monthly payments, contact with a single interlocutor … Your advisor will suggest a fixed or variable rate that will oscillate between 2.20% and 2.80% for your mortgage purchase. This rate is calculated without the borrower insurance, the file and management fees. The repayment term of the credit is 15 years.

 Fixed rate for repurchase of mortgage, 4th quarter 2015
 Duration of the 15-year credit consolidation
 Highest rate: 2.80%
 Lowest rate: 2.20%
 Rate of repurchase of real estate credit calculated except borrower insurance, expenses of file and expenses of management.

Advantages

The credit restructuring proposed by allows French households to control their debt. Many families have opted for this refinancing solution and have emerged from their problematic situation after a few years. They have even been able to envisage new projects thanks to the adaptation of the monthly payments according to their incomes and the personalized follow-up of one and the same advisor.

An online personal space and an My Account Application allows you, among other things, to contact your advisor, monitor the progress of your reimbursement and the debit of the monthly payment.

Loan consolidation simulation

Companies offers you a credit simulation online. This free and personalized service will guide you in your choice of financing so that it is the most adapted to your situation. Targeted simulations will enable you to better prepare your loan consolidation request by indicating in particular the total cost of the operation as well as the cost of the credit at the fixed interest rate.

This tool gives a good overview of your future grouping request. In credit consolidation simulations, credit insurance is rarely included. This insurance, often optional, can be purchased if you feel the need but it may happen that it is imposed in the terms of the contract. You will be able to keep the results obtained and complete a loan consolidation application form if you wish to submit your file to a bank advisor.

If you can no longer pay off your debts, you can go bankrupt. A bankruptcy means that almost all your belongings will be seized and that these will be sold at a bankruptcy auction by the bankruptcy trustee.

When do you go bankrupt?

A bankruptcy is pronounced if you can no longer pay your debts. In the event that two or more of your creditors apply to the court for your bankruptcy, there is a very high chance that you will be declared bankrupt. Bankruptcy is not fun and it is therefore advisable to always keep track of whether you will be able to repay a particular loan, and certainly if you have a negative BKR, be cautious about closing a new loan.

You can try to apply for debt consolidation if you can no longer pay your debts.

This is a scheme that can make sure that you get back on top and that you are not declared bankrupt. You will be assigned an administrator who will help you to get rid of your debts. The debt consolidation usually takes 3 years.

Personal bankruptcy

Both individuals and companies can go bankrupt . If you go bankrupt personally, this means that your assets will be sold to meet the claims of the creditors. Even if you have a one-man company or a VOF, you will go bankrupt and the creditors will tell their money on your personal belongings.

Corporate bankruptcy

You can also go bankrupt in the business sector, but a distinction is made here between the personal liability or not. At a sole proprietorship, you will be personally liable for the debts. This is not the case, although you can still be held liable if you as a director, if you have poorly managed.

Debts do not disappear after bankruptcy

After the bankruptcy your debts will not disappear. Creditors will still be able to knock you back to get their loan repaid. You may be able to conclude an amicable agreement with your creditors to get rid of your debts.

Borrow money despite bankruptcy

Can you borrow money despite bankruptcy ? Although it is very unwise to conclude new debts after a bankruptcy, especially since there are still debts, there are opportunities that you might still be able to get through a loan. However, this is highly recommended! You can usually close mini credits , or close a loan by giving something in collateral to a pawnshop. Please note that (in the case of a pawnshop) high interest rates are calculated and there is a chance that you will no longer get what you give in collateral if you cannot pay off the loan. A mini loan for small loans wisely, all you gotta pay quickly the loan. However, there is usually no check in both a minilening and a pawnshop.

Everyone may have experienced it before, in some cases it is almost impossible to meet their financial obligations. Hardly paying one loan, the next five are waiting to remind you of your former indiscretion with your interest. If you still have enough money and you live without much limitation, nothing really happens, you will repay everything in the foreseeable future. But if it is not so far, there is only one solution – consolidation !

Don’t worry, this solution has already been used by many people with success

Consolidation is possible for some scarecrow, but why should it be? On the contrary, it is rather a helping hand at a time when other options have more likely failed, and even the possibility of enforcement proceedings against you has appeared . That is, a situation that nobody really wants to experience on their own, because there is a lot to be lost. No need to despair, because within a few days you can have a clearer – and consolidate all loans literally under one roof.

This interesting solution is offered by most domestic banks, it is quite easy and most of the work will be done by bank officials for you. So what is a necessity? In short, you just have to log in and, of course, actively cooperate. If you have a real interest in solving the problem, the problem is already solved. And the principle of consolidation as such is actually quite simple;

In terms of consolidation, you have several different options. Let’s go through a comparison of the  banking houses, which also provide the possibility of consolidating earlier loans. Will you consolidate ? Or, on the contrary, will he get the word from banks?

	Bank A	Bank B
Possible range of loans	30 thousand to one million crowns	20 to 700 thousand crowns
Maturity period	6 to 96 months (ie, eight years)	12 to 120 months (ie ten years)
Interest / APR from	4.7 / 4.81%	6.9 / 10.7%
Extra charges	No	No

 

The winner is quite unambiguous, is even half in the case of bank A – and of course it decides in the first place. Consolidation of loans with bank B is thus rather less favorable, but it may bring more interesting conditions than other alternatives on the market. You’ll find out all this with a very simple comparison that takes just a few minutes of your time…

 

 

With the current financing conditions and the prospect of reducing its monthly payments, is the acquisition of loans an interest for French households? Our experts offer you a complete tour of the subject to give you a more precise idea of ​​the consolidation of loans.

How the loan pooling works

Firstly, consolidation and regrouping of loans means the same banking operation ( source ), that allowing to gather several loans in one . A borrower with several loans can call on a specialized organization to consolidate its loans. The organization will pay off its current loans and propose a new loan agreement with different repayment terms, ie a longer duration , a single rate and ultimately a smaller monthly payment .

The reduction of the monthly payment is possible thanks to the lengthening of the duration, which can generate an increase of the total cost of the loan. That is to say that the financing will be more expensive in the end but the monthly payment will be smaller , a logical counterpart that rebalances the budget of households owners as tenants .

What to expect with a consolidation of loans?

When the loans are settled , there is often a prepayment charge of up to 3% for real estate loans, unless there is a clause indicating the non-presence of IRAs. Then, the setting up of the financing also implies expenses of files and / or expenses of mandates, to a height of 7% on average of the amount of the file. For homeowners having a property as collateral , it will be necessary to cancel the mortgage and to hand over a new partner to the consolidation of loans , again there are notary fees.

It should be known that all these steps are managed by the specialized agency which is responsible for summarizing all costs and the cost of the operation to the borrower. The latter will only have to sign the offer of a loan agreement to obtain the reduced monthly payment the following month. Consolidation of loans remains a good solution since the reduction in the monthly payment can reach up to 60% of the current total amount . In addition, 1 French indebted out of 2, according to the INSEE, estimates to have monthly payments too heavy, a recourse to the consolidation of loans which is legitimate and which makes it possible above all to avoid financial imbalances .

What is a consolidation operation?

Definition

Debt consolidation or loan redemption is a financial operation that aims to consolidate several loans of different durations and rates, in a single operation, in order to obtain a lower monthly payment , but over a period of time. longer repayment .

Debts that can be grouped

It is possible to integrate all loans in progress, whatever their nature:

• Consumer credit
• A reserve of money
• A mortgage
• A bank overdraft
• Unpaid invoices
• Unpaid taxes
• Personal debts

Find a solution by oneself

When one thinks of redeeming one’s debts, it is generally that one can no longer cope with its maturities and that its debt is well above 33% of its income. Whatever the urgency of the situation, we advise you to resort to consolidation only as a last resort. The first step is to look for solutions by oneself.

3 steps to follow step by step

Make a clean cut in some of his monthly expenses.

List the monthly withdrawals on your budget and eliminate those that can be stopped: a subscription to a bouquet of pay channels, a phone plan too high and too often exceeded. If possible, opt for a small secure package. Find among your current credits, those that end soon and try to get a bank overdraft or a family loan to clear them. The repayment of an overdraft or a family loan often has the advantage of being flexible in terms of repayment .

Renegotiate the staggering of each debt

If a restriction of your expenses is not sufficient, try to negotiate directly the staggering of your debts with each creditor. Contrary to popular belief, know that it is often possible to obtain a spread. This is the case for example with the tax administration, which is much more conciliatory than we think. If you have a mortgage, check in the preliminary offer if you have the modularity options that reduce the monthly payments up to 30% or even suspend for a year .

You should also know that credit institutions prefer to spread the debt rather than having to do the debt commission of the Bank . This is probably the case of traders to whom you owe money and who appreciate more a direct approach to their debtors rather than receiving a letter from the commission informing them of your financial difficulties.

Finally, it is recommended to present a reasonable schedule and especially accurate. Do not sow doubt in the minds of your creditors by proposing to settle in the year or the months to come or even worse when your situation has improved. Make your proposals in writing by committing yourself to meet deadlines .

Set up an over-indebtedness file

If your attempts have not been successful and before considering meeting banks to redeem your loans, we advise you to set up an over-indebtedness file . This is completely free, the commission in charge of studying your file trying above all to help you.

If your application is considered admissible, it will contact all your creditors: banks, specialized institutions, suppliers, administrations … It will propose an amicable settlement of your situation and a spread of your debts. It is highly advisable to prove to the commission that you are willing to make efforts.

It is therefore essential, once the file has been filed, to stop any expenditure that is not essential. Please note that your application has the immediate effect of you file the (credit repair incidents file to the individual). Your bank will know immediately before the commission is determined on your file.

If your situation is such that it does not allow any solution, the commission may consider a reorganization procedure. If you have some property (other than what is necessary for your daily life or the practice of your profession), a court decision may decide to sell it.

Attention: the debts concerned by the procedure must not have professional origins.

Renegotiate: instructions for use

We can not advise you to be extremely cautious if you have to redeem your credits through a specialized agency. It is also quite possible that you meet an intermediary in banking (broker)

Play the competition

Do not hesitate to meet several brokers and think about asking the amount of their fees. Build several repayment scenarios over several durations. Refuse any proposal that is to “grow” the amount of the new loan in order to release a capacity of savings. Intermediaries who offer this type of solution wear a double hat and try to sell you a savings transaction, most often under life insurance. Do not stray from your goal of reducing expenses and improving your budget .

You can eventually provide additional capital to build cash up front, but the most important thing is to reduce your overall debt.

Consolidation loans

A consolidation loan is when you pay out one loan some smaller loans. In general, the interest rate will be lower, and a good consolidation loan will provide a fixed rate that will not fluctuate with the market. A consolidation loan can be a signature loan with no collateral or it can be linked to something like a car or your home as a second mortgage. There terms of the loan can be adjusted, which can lower your monthly payment by extending the life of the loan.

Benefits of a fixed interest rate

The biggest advantage of a consolidation loan is a fixed rate. This guarantees that your interest rate will not rise despite market conditions, as opposed to most credit cards. Furthermore, you can usually qualify for a lower interest rate than most credit cards. Paying less interest will save you money and mean more of your monthly payment goes to the balance principle rather than to interest.

Finding consolidation loans

There are many different places to find a consolidation loan. The best places to work with are your local banks or credit unions. Start applying there to get the best interest rates and terms for your loan. Companies that advertise on television or in the post often have higher interest rates and fines if you’re late on a payment. They work for people with poor credit history to attract and charge higher rates because of it.

Dangers of consolidation

Although debt consolidation reduces your monthly payments and helps you get a handle on your debt, there are risks involved. If you take a second bond or bind the debt at your home, you are at risk of losing if you miss any payments on your home. For this reason, do not ever pay off credit card debt with equity you cash from your home. Another problem is that many people still use their credit cards after they pay off and find in a similar situation in a few years, only owed them the debt consolidation loan on top of their credit card. If you stop taking a credit card consolidation loan using your credits completely.