LOAN SIMULATION

Debt consolidation : credit restructuring

Consolidation loans

Since 2000, Consolidation Loans has strongly developped in Europe with the arrival of Banks which deal and are specialised in such loans. While Consolidation Loans have already been strongly developped in Anglo-saxon countries, it is now trying to find a solution for individuals who are in a difficult situation of over-indebtedness. Over-indebtedness is increasingly common in European households mainly due to the rise in real estate prices.

The Consolidation Loans is a financial mechanism which combine several loans contracted by an individual into one. This solution is useful when the borrower has enormous difficulty in refunding the debts contracted. The Consolidation Loans also known as Consolidation debts (credits) or credit restructuring can reduce the amount of monthly repayment but it increases the repayment length.

The Consolidation Loans consist of buying all other existing loans, regrouping it into one credit. The rate of this loan may be lower but it will be spread over a longer period of time according to the borrower's income in order to solve his over-indebtness. Finally the borrower will pay a monthly appropriate amount (as according to his income) to help him repay all his debts.

Such institutions offer to Consolidate Loans for mortgages and consumption that the borrower has already contracted.

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