Should I Choose Debt Consolidation or Debt Restructuring? Which Is Better?

Personal debt is a serious problem in the UAE. When ignored or not handled properly, the condition becomes even worse. According to CEIC Data, UAE household debt reached 446.5 USD billion in August 2022. When dealing with multiple loans and debt, you might feel hopeless and think that there might not be a way out for you. Fortunately, you can make things a bit easier for you by seeking debt advisory and restructuring services in the UAE. Debt advisors know how to help you manage your expenses and clear your debt and loan payments.

How to Solve Excess Debt Problem?

Most people find themselves trapped with credit card debt, which grows very quickly because of high-interest rates and penalties that banks charge on borrowers. In addition to credit card debt, a home mortgage is another major component of debt for many people. When you have debt that you cannot manage, there are generally two ways to bounce back: debt consolidation and debt restructuring.

While both debt consolidation and debt restructuring may share some similarities that can help consumers handle their debt, they are entirely different kinds of debt management relief processes.

How Are Debt Consolidation and Debt Restructuring Different?

  • Debt Consolidation

Debt consolidation is a debt relief process that allows a borrower to refinance or convert multiple smaller debts with higher interest rates into one single loan. Paying for one single loan instead of several loans makes it easier for borrowers to pay off their loans in a short amount of time.

If the single loan has lower interest rates, the monthly payment also becomes smaller than before. This also means the money that was previously used to pay the interest payment of multiple loans can now be used towards the loan principal.

  • Debt Restructuring

Debt restructuring is the arrangement in which the loan provider and the borrower agree on an amount that the borrower can pay back. The borrower, also called the debtor, gets assistance from a credit counselor to speak with the loan provider, also called the creditor, in an attempt to get out of the debt owed.

In such a case, the debt counselor works to negotiate with the creditor and tries to come up with an arrangement where the debtor has to pay only partial debt instead of the full debt amount. If it is done right and handled properly, this can be successful. Just make sure that you get in touch with experienced professionals who specialize in debt advisory and restructuring.

The main difference between debt consolidation and debt restructuring is that:

  • Debt consolidation requires a new loan contract and a new loan application
  • Debt restructuring retains the existing contract but involves negotiation.

While a borrower who applies for debt consolidation doesn’t need to be struggling financially to pay off the debt, a borrower can apply for debt restructuring only if he/she is in financial hardship. While debt consolidation may not degrade your credit score, debt restructuring can.

In other words, while both debt consolidation and debt restructuring are designed to provide debt relief and make the debt more manageable, both have different processes and terms and conditions.

If you are also struggling with debt, contact us for debt advisory and restructuring now.

A Beginner’s Guide: Everything You Need to Know about Loan Buyout

Have you been burdened with too many debts? Are you going over budget because of high interest rates? Getting a buyout loan is the solution to these problems.

But what is it exactly? We’ll cover everything you need to know about buyout loans to help you decide if this type of loan might work for you.

Read on to learn more about buyout loans and its benefits and discover how they can help you get started on the road to financial independence.

What Is A Buyout Loan?

You choose a loan buyout facility to repay all your previous loans, for instance any personal loans, merchant cash advances, or credit card debts. Taking out this loan will help you get rid of any other debt that was overburdening you as a result of financial hardship.

Typically, a borrower who takes out a buyout loan must pay a fixed monthly payment to the lender for two to six years to pay off their loan. There are several types of loans that can be financed with it:

  • Mortgage
  • Car Loans
  • Home Loans
  • Medical Loans
  • Educational Loans

Buyout Loan in the UAE     

Consumers with multiple pre-existing loans can take advantage of the facility offered by financial institutions. By settling their previous loans, borrowers can gain access to additional funds. Borrowers can access additional funds through this loan, while also simplifying their monthly payments since they can pay off the buyout loan in one instalment.

Which Lender Is The Right One For Buyout Loans?

When it comes to finding the right lender for best buyout loans in the UAE, there are a few things you should know. One is that every lender has their own individual process, so research is the key when trying to find the one that will best fit your needs. Next step should be to check the loan repayment period, interest rates, and the minimum criteria to avail loan.

Benefits of Buyout Loan UAE      

Do you have any loans or credits from banks or companies in the UAE? Are you unable to repay it? If so, then you might want to consider loan buyout in Dubai as an option for your financial needs. Here are the top reasons why:

1) Competitive Interest Rates

A loan buyout can be a smart decision for those who have exhausted all of their other options. For example, the interest rates are usually competitive and the requirements are not too strenuous. You can easily get a buyout loan at 4%- 7% if your credit score is good.

2) Quicker Procedure

The procedure for getting loan approval is relatively straightforward. First, you should apply for the loan online with an assigned broker. The broker will help assess your suitability for the loan and advise you about its terms and conditions, as well as any available options for loans with shorter repayment periods or interest rates lower than those advertised.

3) Flexible Repayment

A loan buyout can provide a number of benefits. One benefit is that the repayment process is flexible. Repayment schedules can be tailored to suit your needs and are often over time periods of one year or more.

Conclusion

We hope that you gained a clearer picture of buyout loans and how they can help you with your finances. Visit our website for more details.

Debt Consolidation: Is This the Right Thing to Do?

As the name suggests, debt consolidation is the process to consolidate all the debts or loans into one simple, easy-to-manage loan. In simple terms, you only have to deal with one set of interest rates, fees, and repayments, no matter how many debts you’re currently holding. You will regain control of your payments and shorten your timeline to a debt-free life with a debt consolidation service in the UAE.

Debt consolidation has helped many people in managing their finances. But, whether it’s the right thing for you or not depends on different factors. The factors are benefits, your eligibility, and the need for debt consolidation service.

What Benefits Will You Get With Debt Consolidation?

  • The service will improve your credit rating/score as you will make regular payments over several months or years. So, you will see significant improvements in your score without taking any other major steps.

 

  • The debt consolidation will reduce monthly payments as all the debts will be under the same interest rate. You will eliminate high-cost debts and make progress on your principal amount.

 

  • The debt consolidation service is affordable compared to multiple debt loans. Some lenders even provide rate discounts.

What Are Your Needs For Debt Consolidation?

People apply for debt consolidation loans to set themselves free from multiple debt amounts. But, sometimes, this doesn’t work in their favor. And it’s because they don’t identify the actual need and their future plans.

  • You should look for a debt consolidation service in the UAE only if you know for certain that you will not entertain debt in the future. In other words, debt consolidation is right for you if you won’t take out more debt or rack up your credit card bills during or after consolidation.

 

  • If you can meet all your monthly payments, debt consolidation is a great option for you. Missing the monthly payments cause more significant problems, affecting the credit score and progress on the current debts.

 

  • If you are capable of paying off all your debts in 12 months or less, you don’t need a debt consolidation service. You can get over all your debts just by following a strict budget or eliminating the smaller debts quickly.

What Makes You Eligible For Debt Consolidation?

 

  • You are eligible for debt consolidation service if you get a lower interest rate than what you already have on your debt. But, this point won’t be applicable if your credit score has improved since you took out your previous loans.

 

  • You are eligible if you have a steady income that allows you to make monthly payments. You should be comfortable covering repayments with some extra to spare to become eligible.

 

  • You are eligible if your debts don’t exceed 50% of your household income. If debts are higher, you should look for alternative methods of repayment.

 

  • You are eligible if you can pay off a debt loan amount in five years or less and avoid making repayments forever. This plan will let you see success even faster.

 

Debt consolidation service is a savior for you. But, still, you should think twice and analyze your financial condition before applying for the same.

Some Of The Banks We Work With:

Our Client's

We have worked with some of the biggest business clients known across the world and helped them with debt management in unbelievable ways. We have a team of highly professional and experienced members working tirelessly to bring the best debt management plans for you. Our full debt support services give you the complete flexibility to choose the services that you feel will suit your individual or business needs.

  • Simple
  • Transparent
  • Secure

Get Your Personalized Debt Management Plan Now!

Send Request