Are you thinking about consolidating your debts? Not sure what it means?

There are many people who go to debt consolidation to settle outstanding debts.

We will solve your doubts. We explain what debt consolidation means, how you can do it, what are its advantages and disadvantages when to go to debt consolidation, advice and much more.

I need help with a debt consolidation loan

Debt consolidation is a way to make paying your outstanding debt easier to manage.

You do not make several monthly payments in multiple accounts, but instead, this strategy consists of obtaining a loan to cover all or a part of your debts.

What these loans do is accumulate your debts in a single payment. In addition, these types of offers may include lower interest rates than other loans.

Currently, you can find different ways to consolidate debts in the market since you can request a loan despite not having your own home, mortgage, guarantee or being in the bureau.

In short: you can accumulate all your debts into one and save money.

The most common way to carry out the debt consolidation process is to group your existing loans, you can try and apply for a new loan with lower interest rates.

How can Brook help you consolidate your debts?

consolidate your debts

You want to find the best loan to consolidate your debts and do not know where to start.

I understand.

That is why we have prepared a list of the best loans available in the Mexican credit market, to help you find the one that best suits your specific situation.

We want to make the credit market a simpler and more accessible place for everyone. For this reason, we take care to detail the advantages as well as the disadvantages of each loan, its characteristics, associated expenses, hidden expenses, everything you need to know.

So that you do not have any kind of problem when it comes to finding your loan to consolidate your debts.

Because of we?

Because we have international experience and until now, we have made hundreds of clients happy by helping them find the loan they needed.

In addition to Mexico, we are present in 13 different European countries, and we will continue to expand with the aim of continuing to help more users.

Our service is 100% free and non-binding, so you will not have to pay absolutely anything for using our loan comparison service.

If you are interested in learning more about our business model, you can check who we are on this web page.

How to consolidate debts?

debt consolidation

Although the possibility of consolidating debts is becoming more common, the answer to how to consolidate debts is not clear to many.

If you want to consolidate debts, there are  two possible ways :

Hire a specialist company in this task, and that will be responsible for conducting a negotiation with the bank and get a consolidation agreement for you.

Another option is to request a loan of sufficient amount on your own to help you pay the rest of your debts, and pay only a fee.

Currently, there are online financial entities that are responsible for offering debt consolidation loans through the Internet, and you only have to fill out an online form.

In addition, there are different options when consolidating your debts, and in this way, you can choose the one that best suits your specific situation.

Some of the options are a consolidation of debts with a mortgage as collateral, consolidation of debts without collateral, without credit bureau, etc.

Homeless debt consolidation

Homeless debt consolidation

Even if you do not own a home, it is possible to carry out a consolidation of homeless debts or a consolidation of debts without mortgage collateral.

The consolidation of debts, in this specific case, would be carried out through a personal loan.

The amount of the loan will have to cover the total amount of the debts that you have, in order to settle said debts and only pay a fee, which is usually less high.

The entity will take as guarantee only the current assets of the one requesting the loan.

What does it mean?

What does it mean?

That a study of your financial situation (savings, monthly income, and expenses) will be carried out in order to verify that you will be able to face the payment of the loan.

The conditions of a debt consolidation loan will depend on a wide variety of factors.

It must be borne in mind that when applying for a loan to be able to face other pending debts, you will assume the payment of high interest as well as associated commissions, which will depend on the conditions of the new loan.

Where to apply for consolidation of homeless debts?

It is always a good option to request the loan with the entity with which you have previously contracted your loans.

In the event that you have outstanding debts with different financial entities, it is advisable to request a capital increase in the entity with which you have the highest debt.

Another option is a private equity entity, which offers debt consolidation loans if they do not exceed a certain amount, which is generally not very high.

Advantages and disadvantages of debt consolidation

Advantages and disadvantages of debt consolidation

The consolidation of debts has very beneficial advantages for those who need financing to pay outstanding debts. But it also has some very important disadvantages to consider.

Among the main advantages we can find:

  • It’s a way to get fast financing
  • Improve your budget
  • It helps you feel less burdened since you would have all the debts in one account
  • It’s disadvantaged?

If you do not see yourself able to pay on time, it may cost you more money in the long run, making you more indebted

What you need to know if you are thinking of consolidating a debt

Before considering the idea of ​​asking for a loan to consolidate debt, there are a number of factors that you should consider.

The first thing you can do is collect all your bills and determine the amount to pay.

Next, you can use a debt consolidation calculator to help you determine how much you can save using the debt consolidation method.

Since consolidating debt is practically getting into another debt that you will also have to pay, it can end up becoming an inconvenience.

Therefore, loans to consolidate debt will be a good idea depending on your financial situation. You should make an analysis of your income and expenses and see if you can cope with the disbursement of the loan.

Advice before consolidating a debt

From Brook, we present a series of tips in case you are thinking about consolidating a debt:

  • Check all your expenses.  You must know why you are spending more than you enter
  • Make a budget. Make sure you calculate all the costs of the loan to apply
  • Consider the payment that you will have to make monthly and all associated expenses
  • Consider if it’s better than what you’re paying now for outstanding debt
  • Keep in mind that if the loan for debt consolidation does not offer you the possibility of saving monthly, it is possible that asking for a loan is not the best option.

What steps do you need to follow to get a debt consolidation loan?

What steps do you need to follow to get a debt consolidation loan?

When it comes to consolidating debts, this is the most used method, since it offers low-interest rates and convenient repayment terms.

The steps to follow if you want to apply for a loan to consolidate your debts are:

  • Take time to compare options and choose the one that interests you most
  • Fill out a simple online form with your personal information
  • The borrowing entity will send you an e-mail with a proposal
  • If you accept the proposal and its conditions, you must send the documentation required by the lender company

Once the application has been processed, the entity will send you a final contract and will be responsible for processing the consolidation of your debts

Can a debt consolidation loan affect my credit history?

Can a debt consolidation loan affect my credit history?

Conversely. The objective of these loans is to help you improve your credit history, helping you to pay your outstanding debts.

A debt consolidation loan will pay off all the debts you have outstanding, which is a good thing for your credit history.

However, you should know that if you use this type of loan incorrectly and are not able to keep up with the payments, this default will damage your credit history.

Before approving a loan agreement to consolidate your debts, make sure that you will be able to meet all the payments or, on the contrary, you will see your credit history very affected and may end up in the credit bureau.

What is the credit bureau?

The credit bureau is private companies that are responsible for preparing credit histories through information provided by lenders.

These credit histories are used by the entities to evaluate the loan applicant and determine the approval or rejection of the loan.

The information provided by the credit bureau is the following:

  • How many loans have you requested
  • The loan amount
  • Your payment behavior, that is, how and when you pay
  • If you have ever delayed your payments on a loan or debt

When did you pay back in a timely manner?

If your credit history is positive, you will be more likely to obtain financing from lenders.

If your name appears in the credit bureau, you also have financing possibilities thanks to the loans without a bank,  offered by online lenders.

Loans without bureaus are convenient to request and quick to obtain, offered specifically for those people who are part of the credit bureau.

In addition, they are totally safe loans since they follow the current financial regulations.

Where to find loans for debt consolidation?

Fortunately, finding a loan to consolidate your debts is not very complicated.

You can find them:

  • Through online lenders
  • Traditional banks
  • Online loan comparison pages, such as Brook

The ideal is to do research and compare the different offers and options available in the market.

Take the time it takes!

In this way, you will not lose in the long run because you have not considered extra expenses associated with the loan.