You have the right as the debtor to be treated respectfully by the creditor, even when they are sending a recovery agent to your premises for debt collection, or while making recovery calls at your contact number. And in this way, there are many more laws made by the federal government to protect the rights of debtors so that unpleasant situations can be avoided, and yet creditors can attempt recovery respectfully. Another law that helps debtors get excellent debt relief and solutions is the debt consolidation law. If you have not heard about this before, it’s time to get some quality knowledge about it and see if you can consolidate business loans and all your dues through this method.

What is debt consolidation all about?

Debt consolidation is the process of accumulating all your debts under one banner, so that instead of paying multiple loans at varying interest rates, at different dates, to various parties, you pay one mortgage, at a low rate of interest or a fixed interest rate, to just one creditor. This simplifies the process while you also feel sorted and relieved.

Why consolidate your debts?

Consolidation of debts is essential and necessary for a few reasons. It’s not a mandate that you would need a debt consolidation only when starving for food and have nothing left at home after paying debts. Not all situations have to be so deadly serious. Sometimes merely lousy management of the obligations can be the trigger behind going for a consolidation loan. Sometimes you may realize that keeping track of so many loan amounts to different creditors at different dates of the month is very exhausting, and you often skip some dates and unintentionally be the defaulter.

If that is your situation, then you need to feel organized. There is no meaning in letting your credit score gets affected by unintentional late payments, which on one side, changes the score while on the other hand accrues late payment penalties on the next EMI too.

How do get benefited from the debt consolidation law?

You can get benefitted from the debt consolidation law in the following ways:
  • You can consolidate all the loan amounts you are paying now under one single loan, and this can include all the pre-closure penalties, which you will be playing against the current loans while closing them.
  • You get a chance to work on your lowered credit score once again and improve it with timely consolidation loan payments.
  • You pay one loan EMI at one month's date, and remembering this or keeping track is the easiest.
  • If you could have played better financially before consolidating your debt, then after the loan, you can save money and also soundly go through your monthly expenses. This helps you financially get stable.

Altogether consolidation helps you rebuild your financial stability while you can also restore your credit score and credit history. At the same time, you can get other loans after you have properly closed the consolidation loan. You may learn more about debt relief means from visiting educational sites and resources like

Who can get a debt consolidation loan?

Only some people can avail of this unique feature or offer. A debt consolidation loan is given after some checks. As per the debt consolidation law, you must cover the following to get a consolidation loan:

To get a debt consolidation loan, you must have a healthy credit score. The lender will do a credit check on you to see your credit history and records of defaulting. Your credit record must not give a very unhealthy glimpse.
  • You must also have a stable sound income with proof of employment of over 6 months.
  • You must have permanent residence proof that you have been staying for more than 6 months.
  • You must be a government-issued photo Id cardholder.
  • You must have a checking bank account at a local bank.

If you meet the above criteria, you can apply for a debt consolidation loan.

Things to keep in mind while applying for a debt consolidation loan

You should go for this step only when you are sure that you will succeed in the payments ahead. If you are still determining and think this is a good step to get out of your current debts and yet stay uncertain of what happens with the new loan, then you should not go into this pitfall.

You must be able to pay the EMI for the consolidated loan every month through the tenure so that you may get financially stable, steer clear of all debts, and also build a healthy credit history to get loans in the future if needed.

How to avail of a consolidating loan?

Applying for a debt consolidation loan is easy with many online comparison tools. You can fill out a form online in a few minutes to apply. And soon you will know if you are approved and what quotes the various lenders offer you. Choosing one and passing their check will quickly get you through the processing, and you will get the amount disbursed soon.

Other debt relief methods

If you do not qualify for a debt consolidation loan, then you still have other options. You can apply for debt settlement too. This is a case of negotiation with the creditor, where you can hire a settlement advisor or agency to handle the entire operation on your behalf and get things settled. When your credit score is too disturbed to get you a consolidation loan, and when you don’t have a stable income to pay for the loan EMI each month, the settlement is an alternative. However, a debt settlement is a long-term process full of uncertainties, unlike a debt consolidation loan, which guarantees a solution and freedom from debt in a few years.