Are you having problems paying your credits? Are you looking for alternatives to be able to meet your payments? If so, one of the options that exist is debt consolidation. It’s a loan? Actually, it is, it is for this reason that it is very important to know exactly what this alternative is and how it works, so here we bring you all the necessary information.

 

What is debt consolidation?

 

It is an option to consider when you are having problems settling your financial commitments, it is about grouping all the debts you have with different institutions into one.

The key in consolidating debts is in the previous analysis, since you should consider an institution that offers you better rates or conditions than the ones you already have, so that it can actually mean support. On the other hand, it is not an option that every banking institution offers, so you should analyze who does.

What elements should you consider when consolidating debts? Mainly you should check that it is a low CAT (Total Annual Commission) and lower interest rates. Do you think it could be a good alternative for you? Then let’s analyze how this process should be carried out and the elements to take into account.

Take accounts and make a budget, so you can know your real payment capacity and how much you can pay to your debt.

How to consolidate my debt?

 

 

If you are thinking of consolidating your debt, CreditNigeria recommends that you do it in the following way:

 

Budget

 

Make a budget, this will help you determine what your payment capacity is, in this way you will be able to be clear about the monthly payment with which you can comply. Based on your budget, identify which expenses you can do without.

 

Financial institution

 

Choose the bank with which you want to request consolidation, remember that not all of them offer it, also find out if you are a candidate for this alternative. Have direct communication with them and carefully analyze what are the characteristics that your agreement will have, what will be the CAT, interest rate and the amount of your monthly payment.

 

Do not use intermediaries

 

Lastly, it carries out the negotiation directly with the banking institution. Do not use intermediaries, thus avoid being a victim of some type of fraud.

 

Tips to consolidate my debt

 

 

Be organized with your payments. Keep track of cut-off or payment dates. The fact of gathering all the debts in one, will help make the organization easier, you will also save yourself the payment of different annuities or other commissions.

Before doing a debt consolidation, check if the interest rate is lower than your separate debts, if not, this agreement will not help. You should consider that by lowering the monthly payment you will pay, which is one of the objectives, the term will increase, so you will last longer paying.

By consolidating your debt you do not affect your credit history, for this reason it is more recommended than the alternative of a debt reduction, which does affect your history.

When you are in a complicated financial situation, it is normal for us to wonder what to do if I cannot pay my debts, options such as debt consolidation are solutions that can be analyzed if the moment so requires.

However, it is always advisable not to over-indebt yourself, so you should not request more loans than you can pay, have a budget and stick to it