Credit consolidation remains popular

Reducing monthly payments, regaining financial flexibility, or financing new projects are among the reasons individuals turn to credit consolidation, which involves combining multiple loans into a single payment, often with a lower rate. However, this process typically extends the repayment period, potentially increasing the total cost of the loan.

Interest rates are at their highest in two decades

The 10-year OAT, the French loan rate, has reached its highest level since 2002, contributing to higher interest rates for credit consolidation. Meilleurtaux reports unsecured consolidation rates ranging from 5.92% to 8.20%, while secured consolidations under the consumer credit regime range from 5.47% to 7.06%.

Property owners benefit from tighter lending conditions

Banks are examining applicants' banking histories, payment incidents, and ability to manage expenses. Property owners appear to have an advantage, as their files are more easily accepted, particularly when the property can be used as collateral. At Meilleurtaux, 63% of credit consolidation cases in 2026 involved property owners, compared to 37% for renters and similar cases.

Credit consolidation serves various financial goals

Credit consolidation is not only for households in financial difficulty. Two main categories of borrowers exist: those seeking to reduce monthly expenses by consolidating multiple loans, and those with controlled debt who wish to free up cash for projects such as home improvements or vehicle purchases. At Meilleurtaux, about 25% of cases involved a cash need exceeding 15,000 euros.

Long-term costs may outweigh short-term savings

While credit consolidation can reduce monthly payments by an average of 370 euros, a 40% decrease, it often results in higher overall costs due to extended loan terms and additional fees. Sandra Novais notes that the total cost increases in most cases, except when consolidation replaces high-rate loans with significantly lower rates.

Borrowers should carefully evaluate their options

Before proceeding, borrowers should compare the total remaining amount of existing loans with the full cost of the new operation, including insurance and fees. Although credit consolidation can provide financial relief, it does not eliminate debt. For the most fragile households, securing bank approval remains a challenge.