How does credit consolidation work?

Credit is easy to take out and appeals to many consumers. But over time, some of them find themselves over-indebted and unable to repay everything. To control the budget, grouping credits is one of the best solutions.

What is credit consolidation?

Also known as the repurchase of credits, the grouping of credits is a banking operation consisting in bringing together all the credits in progress in one, with a harmonization of the conditions (fixed rate, single monthly installment and fixed duration previously defined by the bank and applicant) .

This operation concerns the following credits: personal loan, consumer credit, mortgage (works, purchase of real estate, etc.), car / motorcycle credit, debts, bank overdraft, any future credit, …

Thanks to the grouping of credits, not only will you spread the debt over time, but you will also be able to obtain additional liquidity for the financing of a new project (real estate, motor vehicle, etc.). Whether you are a landlord or a tenant, you have the possibility to benefit from it (provided of course you meet all the conditions).

How does credit consolidation work?

The operation of the grouping of credits consists of 5 different phases.

Credit consolidation request

The beneficiary contacts a lender to request the repurchase of the credits. This is usually a credit institution, bank or banking intermediary.

Study of the dossier

Once the request is received, a consultant verifies the information and starts the study of the case. In other words, this means that he examines the various supporting documents (credit cards, bank statements, payslips, etc.).


An analyst then calculates the feasibility, taking into account elements such as the mortgage ratio, the rest to live with, the borrowing capacity, etc.

If the study is conclusive, a credit consolidation offer is proposed to the applicant.

Receipt of the contract

The contract is sent to the applicant and the latter benefits from a cooling-off period before signing it. When the lender requests a mortgage guarantee, the intervention of a notary is required.

The contract includes all the terms of the credit consolidation, i.e. the monthly payments, the rate, the repayment period, the total cost, …

Release of funds

The funds are released as soon as the 2 parties sign the contract.

The financial organization proceeds, in advance, to the repayment of the credits with the various creditors of the applicant.

The repurchase of loans is the solution par excellence to avoid the risk of over-indebtedness. Consolidate all credits and loans into one, thus reducing monthly payments. But since it implies an increase in the total amount, it should be used with the utmost caution.

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