Debt consolidation loans in 10 points
The purpose of a debt consolidation loan is to consolidate all of your debts (personal loan, credit cards, leases, store cards) in order to negotiate a lower interest rate and simplify administrative procedures by reducing all of your bills into a single monthly payment.
The 10 questions below provide additional information on this topic:
1. At what point is a debt consolidation procedure a good idea?
A debt consolidation loan is advantageous when you have 2 or more debts with different institutions. If your interest rates are already very low and if further reductions would be very difficult to obtain, you will not profit from this solution.
2. Is there a minimum threshold for grouping together debts?
No, no minimum amount is required to initiate this procedure.
3. Can I consolidate a portion of my debt only?
If your budget allows for it, you can do whatever you want. Sometimes however, the financial institution will demand full consolidation in order to grant the debt consolidation loan.
4. Can a financial institution with which I have taken out a loan oppose a debt consolidation procedure with another institution?
No, the prepayment entitlement is a legal obligation stipulated in each loan agreement. It is an obligation provided for by the Swiss Consumer Credit Law (in french).
5. Can I change the repayment period?
Given that a debt consolidation loan requires a new contract, any changes are possible.
6. Does a broker or bank have the right to claim fees or expenses for the administrative procedure?
No, brokers are paid by the banks and do not charge fees.
7. If I have already taken out a debt consolidation loan, is there a simplified procedure for adding a new lease for example?
No simplified procedure exists for any new debt consolidation request or new loan request. The application must be resubmitted in its entirety.
8. If you have obtained a ZEK code in the meantime, will this prevent debt consolidation?
Debt consolidation is subject to the same rules as a new loan, which means that any negative information may compromise attribution of the debt consolidation loan.
9. If you are in a relationship and each person has outstanding loans, can they be consolidated and allocated to a single person?
Yes, if the budget of the person in question allows for this and if the couple’s overall financial situation is solvent.
10. If the bank refuses your debt consolidation application, will a code be registered at the ZEK?
Yes, code 99.
- Categories: Consumer credit