Loan consolidation over 15 years (180 months)
Posted On April 16, 2019
Why a 15-year loan consolidation?
The advantage of opting for a loan consolidation with monthly payments more spread out over time is to pay a smaller amount every month and to be able, at choice, to make some savings or to remove the specter of over-indebtedness in most serious cases. Indeed, all the credits are gathered in a single entity in order to “cancel” the most oppressive monthly payments and to regulate its budget accordingly. This results in a lower debt ratio and a higher purchasing power. As a result, you are in a better position to plan a new project or to set your month ends. In addition, a repurchase of credit accepted by a financial institution implies that you are trusted and in your situation, which will promote your chances when making a new loan.
The duration of the repayment varies according to the offer proposed by the organization but it also depends on the client’s situation: some have a heavy credit to repay and can not pay it through the repurchase of credit over a long period where others choose to spread payments by strategy, to better manage their budget over the short or medium term. In addition, some organizations agree to collect all existing credit, which includes consumer credit and real estate loans. Also, a repurchase of credit involves not only the collection of credits to be paid but also the additional costs (of file or of notary) as well as the interest rate, which results in a total sum higher and pushes certain customers to choose a repayment in the long run.
Example of a repayment over 15 years (180 months)
A person had to pay a total credit of 56197 euros, with 4 monthly payments amounting to 1302.13 euros. With his loan consolidation, his credit passes to 58507 euros (taxes and additional fees included) but with a single monthly payment of 521.53 euros for 180 months.
Why negotiate the repayment term?
As stated above, the repayment period will not be the same depending on the client because each situation is different. You should choose the one that suits you best and for that, you have to negotiate certain parameters that will affect the final offer. Your repayment term is closely related to the interest rate and the amount of the monthly payment. But the longer the repayment period, the lower the monthly payments but the higher the interest rate will be. We must know how to juggle these parameters and not postpone the deadline at any price.
In addition, it is not always useful to opt for an extended repayment period. While this may reassure some clients who primarily want to breathe financially or have to deal with an unexpected event such as an accident, others choose to buy a loan to finance a project or simply to save some money. These people are not in an emergency situation and therefore have no interest in extending their repayment period if they are able to pay a certain amount per month.
For this reason, you must control your budget and evaluate (or have evaluated) the maximum amount of this single monthly payment which, as a reminder, must not exceed 33% of your income. Similarly, logically, the more you are in a financially stable situation, the more your voice will count when negotiating the amount, the duration and the interest rate.
For this, you can use our online comparator which allows you to compare the offers of each organization and give credibility to your project by choosing the best amount of your monthly payment and the best repayment period.