When should you choose consolidated credit?

Do you feel it is the ideal time to consolidate your credits? In this article, we explain to you when to choose this type of financial solution and when to look for another option.

1. Moments of labor instability – no


The loan consolidation has many benefits, yes, but not always is at the right time to do so. For example, if you do not have professional stability, you may think that consolidating your credits is a logical step to take, but the truth is that it will be very difficult to obtain such approval. 

As a rule, it is only possible to carry out credit consolidation if it is effective in the workplace, this is because financial institutions do not want to run the risk of the credit holder becoming unemployed and no longer having the ability to meet credit obligations. 

That is if you are in a situation of job instability and want to consolidate your credits, know that it is not the ideal time to make that choice.


2. Periods of economic growth – yes

2. Periods of economic growth - yes

We tend to think that only when there are financial difficulties is it necessary to consolidate the credits, however, there are more favorable times to do good consolidation deals. At a time of economic growth, such as the one we currently live in, when banks have greater liquidity, they have the best consolidation opportunities at their disposal.

 This is because banks are available to offer much lower rates, thus reducing their monthly charges by reducing (they can achieve a reduction of up to 60% in their installments ).


3. When the effort rate is above 40% – yes

3. When the effort rate is above 40% - yes

It may seem obvious, but the big warning that you urgently need to consolidate your credits is when your effort rate is reaching very high percentages. With effort rates of around 30%, as a rule, there is no pressing need to consolidate your credits. 

On the other hand, when your effort rate reaches 40% or even exceeds this value, this means that you have a very heavy burden on the credits and you should consider consolidating them. This way, you will get a bigger monthly break and will avoid falling into the situation of being in default with the monthly installments.


That said, it is always important to note that each case is unique. Debt consolidation must be analyzed in a customized way. If you are considering applying for a consolidated credit, try to analyze your particular situation very well and understand if this is the most advantageous time to opt for this financial solution. 

To do this, always consult with a trusted credit intermediary. At Lite Credit we present solutions tailored to your financial situation. Get in touch with us and get the support you need to make the best choice.