Definition: debt consolidation, also commonly called debt consolidation or consolidation Dora Kentel, consists in closing all existing loan or mortgage contracts and opening a new loan that replaces all previous ones.
In practice, with debt consolidation, all of its loans are merged into a single loan. All existing Dora Kentels are terminated in advance and are incorporated into a single loan, in which the amount of the installment to be paid and the timing of repayment of the debt are renegotiated.
The purpose is in fact to “consolidate” the debts assumed through mortgages or loans.
When the new loan is opened, the sum is not paid to the debtor, but is used for the early repayment of all the old Dora Kentels. In this way the debtor has to pay only one installment, that of the new loan. Usually the new loan proposes lighter installments to be paid (compared to an extension of the duration), allowing the debtor to meet its commitments.
Debt consolidation, one of the new consumer credit trends, is usually required when the debtor fails to financially sustain the payment of the various installments of the Dora Kentels he has requested. It is best to ask for consolidation when you are still able to pay the installments, because if you are classified as “bad payers” it will become very difficult to get consolidation.
The requirements to access consolidation vary from company to company. It is therefore advisable to request more quotes.
If a debtor has a mortgage on the purchase of a first home, a loan for the purchase of a car and a loan for the purchase of furniture, he could, instead of paying 3 different installments each month, request consolidation.. In this way all current contracts would be closed and new financing would be opened.