Debt consolidation can be used to arrange and standardize multiple financial obligations. By collecting debts in one debt and paying it in monthly installments, the person will be able to gradually repay, and not to be dispersed in the repayment of many debts and loans to several entities.
The financing of debt repayment is considered one of the financing products provided by banks or financing agencies to its customers, according to the specific regulations and instructions, where the customer is allowed to obtain a new financing to be used to re-arrange and settle his current credit obligations, and then the customer meets the monthly financial obligations resulting from this financing, according to For tips and advice mentioned by the Saudi Arabian Monetary Agency on its website.
The Corporation indicated that there are fees that may be borne by the customer in the event of obtaining one of the debt financing payment products, indicating, for example and not limited to, the early payment fees for financing that represent the cost of reinvestment, not to exceed the cost of the term for the three months following the payment, in addition to compensation The financing authority for what you pay to a third party due to the financing contract, and it cannot be recovered, pointing to the administrative fees for the new financing that are estimated at a specific percentage of the financing value.
She indicated that one of the characteristics of financing debt repayment is the unification of any obligations, loans or debts on credit cards and others, through obtaining new financing to pay off all debts in easy monthly installments, or debt management, noting that instead of being dispersed between many of the funding agencies, The customer can merge his obligations to these entities with one entity and then pay them. The Corporation clarified that it is another characteristic of reducing the cost of debt, for example, if credit card debts accumulate, and there is a high profit margin that applies to the amounts due, because personal financing to refinance these dues will reduce this cost, and improve the credit report, indicating that the monthly installments for refinancing usually It is less than the monthly payment installments for multiple obligations with more than one party, and thus the chance of defaulting or delaying is less.