This institution has two undeniable advantages for the debtor. First of all, it makes it possible to reorder – from an administrative point of view – all the installments: the debtor will no longer have to deal with many postal bills, will control the entire situation and will not risk forgetting to pay a few installments. Secondly, the consolidation of debts allows to reduce the total installment: the debtor, in fact, can get better interest rates than those applied in the individual original loans. An undeniable advantage.
The capital provided through debt consolidation may also exceed the amount of the capital initially financed: in this way the debtor will have new liquidity available to make his purchases.
With regard to the guarantees required to protect debt consolidation, they are more or less the same as for normal loans. In some cases it will not be necessary to lend new warranties as well as being able to be used for the original financing. Finally, many financial institutions grant this type of loan also with the assignments of the fifth salary: a solution, this, which brings many benefits also to “bad payers”.