When and how to consolidate your loans: a practical guide
Beyond the question of whether it is a good or bad idea, this practical guide helps you spot the right moment to consider consolidation, and understand the concrete steps of the process.
The signs that should get your attention
- Several loan due dates spread across different days each month
- Disposable income that keeps getting tighter
- Recurring overdrafts despite stable income
- A feeling of losing track of your overall budget
The concrete steps of the process
The process starts with a precise inventory of all your current loans (remaining balance, monthly payment, rate). This list forms the basis for the consolidation simulation, which lets you compare your current situation with the proposed consolidation.
What is typically required for the application
As with any loan application, you will need proof of income and identity, along with statements or amortisation schedules for the loans you want to consolidate.
After it is set up: managing the transition well
Once the consolidation is approved, the old loans are paid off directly, leaving only the new single monthly payment to track. It is a good idea to check that each old loan is indeed closed once the consolidation is complete.
Frequently asked questions
Do you have to consolidate all your loans, or only some of them?
This depends on your situation: loans with a very favourable rate can sometimes be kept out of the consolidation, to be assessed case by case.
How long does setting up a consolidation take?
The time required varies depending on the complexity of the file and the number of loans to consolidate, but it takes longer than a simple standard loan application because of the checks needed on each existing loan.
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