What Is Debt Consolidation

What Is Debt Consolidation

Nowadays we often find ourselves faced with various installments to be paid at the end of the month, perhaps the various loans requested (mortgages included) rise above our hair, we have difficulty managing them and organizing them in the best way and the question that arises is: but can’t you pay everything in one convenient installment? And if it were possible, would it be a convenient choice?

This is precisely the purpose of debt consolidation : a form of financing which, for those who have had to ask for more loans, allows them not only to combine them but also to lighten the economic burden. In fact, the single installment will be lower than the sum of all the multiple monthly installments that you are used to.



Surely the intent is to facilitate and simplify the method of payment of multiple loans, but if debt consolidation is used, it cannot be emphasized that the starting point, in most cases, is a negative one: in fact one of the the main reasons leading to the demand and the need to combine various installments into one is the crisis and the consequent economic difficulty that results.

Obviously to make a request for debt consolidation there are the necessary requirements, the limits, the advantages, the disadvantages and the guarantees that must be analyzed in detail. First of all it is necessary to understand if you are on the side of who can apply for debt consolidation and what kind of employment contract is necessary.



The ideal situation that makes it possible to request debt consolidation with greater ease is that of someone who has first of all good creditworthiness.
One of the fundamental requisites for requesting debt consolidation concerns the work situation, specifically: you must be self-employed with constant demonstrable revenue, have an indeterminate employment contract, a length of employment that is not less than 12 or 24 months or be the holder of a pension.

The age limit is less binding and is very wide, it goes from 18 to 75 years, a feature that allows many people to be able to take advantage of this type of financing to better organize mortgage and loan installments.

Companies can also apply for debt consolidation, while a separate chapter deserves the question of bad payers, analyzed a few paragraphs later, which is not a situation without hope or possibility to materialize.


After having briefly defined the same, that is the union in a single monthly installment of various financial loans to be disposed of at the end of the month at one time to facilitate the organization of the applicant’s expenses, it is of fundamental importance to analyze in detail how it works and which are the bodies to which you can apply for this kind of financing.

First you need to choose a credit institution to refer to, it doesn’t matter if the previous loans come from different banks. It would be better to opt for a recognized institution (be it banks or financial institutions) and avoid relying on DIY, which on some occasions could be counterproductive and perhaps incur unpleasant surprises or unexpected situations.



The chosen bank will depend not only on the rate of financing but also if it is the same or the applicant that deals with the closing of other loans with other third-party institutions. In the latter case the customer will have to go personally where the loans are active.

But how do you make a single installment if the deadlines of the previous ones were different? With debt consolidation it is possible not only to decide for a new duration of the loan, but over time also to renegotiate or extinguish the loan altogether, in the event of a desired improvement in the economic situation. Obviously, if the duration of the loan is extended for longer, the stipulated installment will be lower, especially if the reference bank rate is particularly advantageous.

Careful attention must be paid if there is a need to modify a previously stipulated loan with a request for extension, as in most cases the rates can be higher. Consequently, convenience could leave room for an economic loss rather than an alleged facilitation.


Debt consolidation represents a convenient situation especially if the rates of multiple loans to be reduced to a single installment are not very advantageous, otherwise it would be necessary to pay more attention and perform the calculations well in advance. Where to start: the first step, which is indispensable for an initial assessment that can come to fruition, is to take into account the rate of the reference bank for the request of the only installment to be stipulated. The true and tangible economic saving on which the calculation of the installment develops monthly can improve the life from the economic point of view, and facilitate the management of the expenses of the applicant.

The other advantage, to which many, not only individuals but above all small and large companies, is the convenience of paying all the loans in a single monthly installment and the simplicity in organizing the expenses avoiding the many newsletters that otherwise they would accumulate.



After discussing how debt consolidation works and who can request it, an important question arises: how can the rates of the various institutions be compared to choose the most advantageous offer and make the best choice avoiding future regrets? There are services that deal precisely with comparing loans for the choice of the most advantageous rate for the realization of the single installment, one of these is for example Prestitionline.it. This portal aims to inform about the best rates of the day and is constantly updated also on the reference institutions. Or you can consult the websites of the various banks and the rates, find out about the available rates and make the comparison starting from the data collected by the individual sites.

Doing extensive research on the rates of the various institutes you want to address is of primary importance and is a way to ensure that debt consolidation is really the best solution economically speaking and not a way to go and lose or leave the own situation unchanged.


Debt consolidation can also be a good solution for companies, as a financial instrument can be used to get more liquidity to invest. With this solution, in fact, a company can lower the monthly installments by conveying them into a single installment that is easier to dispose of but can also take advantage of debt consolidation for long-term investments.

Another positive aspect is that debt consolidation for companies allows for constant installments over time that do not increase, so as to better manage the expenditure.

It is possible to request online, not only for individual applicants but also for companies, for estimates on debt consolidation specifically for companies to compare the most convenient rates, installments and offers as required.


For the request of debt consolidation there must usually also be a guarantor with rather similar characteristics to the applicant: a good credit situation, but above all a fixed income that can guarantee the coverage of the installment in case of lack on the part of who requests the loan.

It is not advisable to change the installments as there is the risk of foreclosure of the assets in the event of failure to pay the monthly installment.

The banks also, as a guarantee, can also request the motivation of the loan and also ensure that this, once disbursed, can be satisfied by the economic possibilities of the individual. Precisely to give material time to the referring institution to ascertain and verify some of the applicant’s dynamics and situations, and if it is the case or not to grant the loan (before being approved, the request passes through the Central Risk Center where it is possible to identify the bad payers), it is advisable not to make other requests for loans. In the latter case the loan is usually denied. It is preferable to wait for the outcome to proceed with other requests or possible solutions.

age limit: 18-75 years guarantor with good credit situation
creditworthiness guarantor with fixed income
work situation: self-employed or permanent contract motivation of the request by the bank
seniority not less than 12 or 24 months or a pensioner verification of the economic possibilities of the individual



It is noteworthy that, in most cases, already facing a solution of this kind implies a situation of basic financial difficulty that mainly involves the area of ​​loan management. If the rate you find is advantageous surely debt consolidation is among the solutions, if not the best solution, even if every case should be taken with all its peculiarities and needs without generalizing too much. Only the applicant is aware of his possibilities, the reasons that lead him to a choice of the kind, the rates of other loans and his specific economic situation.

In fact, the true and real convenience must be assessed by the applicant in a subjective manner, based on calculations and accounts made on the various institutions and their respective financing rates. The result obtained, ie the single installment, if lower than the sum of the other installments, as is desirable in most cases, is the response to the actual convenience or otherwise of debt consolidation.



The overview of the general conditions for requesting debt consolidation is clear, as well as any guarantees required and to whom to turn for such a choice, but if you are bad payers there are hopes? And who is considered a bad payer? The bad payer is the one who has missed the payment of one or more installments of a debt contracted with a financial agency and consequently is reported and subsequently registered at the end-to-end knowledge company, Financial Risks Center. Despite the difficult situation, today thanks to Law 03/2012 there is the possibility of obtaining a debt consolidation even for bad payers.

How does it work? Individuals who are unable to pay their debts can apply to the Court which will have an analysis of the debtor’s financial situation and will put in place a debt payment plan with a single installment compatible with the over-indebtedness situation, without the need to provide any mortgage guarantee. Furthermore, the residual sum of the total sum will be canceled, which is incompatible with the current financial situation.



However, there are times when it would be better to avoid the debt consolidation option:

  • if there is doubt about being able to pay the amount of the single installment
  • if there is a loss of expenses and financing costs
  • if the factor of interest in the choice of debt consolidation has been underestimated, how much it is and how it is allocated with respect to capital.

In short, there are a number of factors and circumstances to consider before proceeding to a request for debt consolidation and should not be underestimated if you want to be certain that you have made the right choice for your financial situation.

if you have more loans if you are unable to pay the calculated installment
if the bank rate is advantageous if there is a loss of costs and financing costs
if you own a company if the interest factor has been underestimated


Debt consolidation has many objective advantages and can also allow you to obtain additional liquidity in some cases, an option that should not be underestimated and that certainly appeals to anyone. So if you have the requisites and the guarantees necessary for the request of a single installment you can begin to evaluate the possibility of requesting the loan. Thanks to the numerous tools and portals available today, it is possible to obtain results concerning all the necessary information, such as rate, convenience, updated tables and lists of affiliated institutions, quickly and instantly.

Debt consolidation can really be an opportunity if the costs are well calculated and well-considered evaluations are made based on research and careful calculations that compare a current situation, made up of many installments, and a possible single installment now achievable thanks to this option.