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What rate for a debt consolidation loan?

Blog | Credit Repurchase

You have an ongoing personal loan, and you would like to benefit from a lower interest rate? Then a debt consolidation loan may be the solution to get a lower rate while re-arranging the terms. What are the benefits of this solution, and what rate can you expect?

What is a debt consolidation loan for?

A debt consolidation consists to “transfer” your loan from one company to another (or even within the same company). Doing so allows you to make a new contract and, thus, to change the credit terms:

  • Duration: given that you will make a new contract, you have the opportunity to change the repayment duration of the loan. With a longer term, you will get lower monthly payments.
  • Amount: a debt consolidation allows you to ask for a loan supplement as well.
  • Rate: it is also an opportunity to negociate a lower rate.

What interest rate?

The rate of the new consolidated loan will depend mainly on your financial situation and your credit history. In order to get a lower interest rate:

  • Make sure to submit your situation in the best possible way, in particular do not forget to declare any additional income that could improve your budget.
  • Make sure your current loan bills were paid in due time.

The rate for a debt consolidation is the same than for a loan: from 5.9% to 9.9% in Switzerland, according to your situation and budget. If you have an ongoing loan with a higher rate, then you will probably get a better rate while consolidating your credit. Also, do not hesitate to ask a specialist like Creditloan to consolidate your loan.

A same rate debt consolidation?

Sometimes you can be offered the same rate for your debt consolidation. The consolidation is still interesting as you have the possibility to ask for a cash supplement, or to renegotiate the repayment duration. However, you should remember that a longer repayment period means higher interests.