Surely you have heard many times the concept of reunifying a debt , and you have heard opinions against and opinions in favor, advantages and disadvantages of this financial figure, and you have asked yourself if you could be useful in the economic situation that you are currently going through.
The reunification of debts, as its own name indicates, implies the fact of grouping several loans into one only , which gives us advantages such as having a lower interest rate, a longer repayment term , and, therefore, a monthly fee to pay much less, something that will make it easier for us to reach the end of the month without so many headaches.
Contents of the article
- 1 Get payday advance consolidation now
- 2 How is a debt reunification done?
- 2.1 How much does it cost to reunify debts in financials?
- 2.2 Reunify loans and debts in banks
- 3 All costs of debt reunification
- 4 Can I reunify my debts without mortgage / housing?
Get payday advance consolidation now
The reunification of loans becomes more common every day, at the same pace as the savings of the families touches the ground. Consolidate all loans via Pushbuttonfor.org to face a single payment, is an interesting way to get a lower monthly fee and get to the end of the month with some money in your pocket.
Advantages and disadvantages of reunifying credits or loans:
- The monthly fee that you will have to pay, will be much lower than all you paid.
- The interest will be much lower than with your consumer loans.
- By reuniting the loans you get a longer amortization time.
- The expenses for the cancellation of the loans must be paid.
- You must pay the expenses for the opening of a new loan, a mortgage or the novation of the mortgage that you already had.
- We will obtain a personal or mortgage loan that we will have to pay for more time.
It can be a good solution to fix a financial problem that can not be extended any longer, such as an imminent auction or embargo situation.
- The ideal is to unify all debts in a mortgage, since the repayment term can be extended to 35 or 40 years.
- If we reunify it in a new personal loan, we will notice a much lower reduction in fees.
How is a debt reunification done?
If a person has several loans, for example, car financing, credit cards, personal loans and a mortgage loan, he can proceed to reunify his debts, joining all those loans under the umbrella of a same mortgage loan .
For this, all previous loans are canceled and a new loan is requested, ideally with a mortgage guarantee, which can cover the previous loans and the commission that the intermediary can charge. Then, we find that the reunification of several debts is very similar to formalizing a mortgage loan to use.
How much does it cost to reunify debts in financials?
What they will offer you is a personal loan, which is enough to cover the ones you already have open. You have to count on the payment of possible commissions for closing them, and for opening the new one.
The financial companies are more flexible and in many of them it does not matter if you are in asnef or another list of defaulters (with debt less than € 2000), but they will not grant it if you present yourself without a guarantee of any kind, to ensure the return of the money.
Example : we have 3 credit cards in which we have financed purchases worth 4,000 euros and a travel loan worth 6000 euros. The result is a monthly fee of € 550 that we need to reduce.
- We ask for 10,000 euros.
- We will pay in 5 years.
- Interest rate of 8.3% APR
- Monthly fees of € 202.77
- Total to pay 11,791.98 EUR
- We ask for 10,000 euros.
- 5 year amortization period
- Interest rate of 12.64% APR
- Monthly fees of € 222.20
- Total payable 13,364.53 EUR
Reunify loans and debts in banks
If over time you have contracted several debts and want to unify them to pay a single fee , your goal should be to get a single mortgage at your usual bank. So your first option would be to access a mortgage backed by a home that you own, and that in general will give you a much lower interest rate than in the financial ones.
Refinancing in ING Direct
In the mortgage simulator that ING has , you fill out the form with your information about the income of the holders of the future mortgage and the expenses you have with other loans. This takes you to a simulator where you can select “Mortgage my house. To Refinance or cancel debts. “
- They give you up to 80% of the appraised value of the home.
- You have a term of up to 40 years to pay it.
- The commissions are 0%.
- The minimum amount to request is € 50,000.
Example : we have 2 personal loans with Cofidis, BigBank or any other financial, for a value of 40,000 euros, a car loan of 6,000 euros, and a credit in the BBVA of 4,000 euros. All this generates a monthly payment of € 915 .
– Our monthly income: € 3000
– Expenses on other loans: € 915
– Value of the house: € 150,000
We will ask for an amount of € 50,000 to settle everything we owe, for a term of 20 years. What results in a monthly fee of: € 233.12 / month
For your particular case Remember that you must always add the cancellation fees of each loan, if any, and the commission for opening the new loan, as well as any other expenses. Remember also that these interest rates are indicative, and that it is the entity that makes an assessment of the risks and puts a price on the operation.
If you did a reunification of debts without a mortgage, it would lead you to ask for a personal loan that brings everything you owe, and you would not get such a large reduction in the amount of the monthly installments, since the repayment terms are shorter and the interest a lot. Taller.
All costs of debt reunification
- First of all there is the commission for the cancellation of the loans, the initial mortgage or other debts. These commissions tend to oscillate between 0.25% and 1%.
- Cancellation costs of this mortgage and loans. Canceling a mortgage is not free and requires payment of a series of fees such as notary, registration, etc.
- Commission for the opening of the new mortgage. The vast majority of mortgages have an opening commission, so when making a novation, we will have to pay the expenses of the notary, registry and agency.
- Tax on Documented Legal Acts. When registering the mortgage, this tax must be paid.
- The commission of the financial intermediary, in case the reunification is not done directly with the bank or cashier. Something that on the other hand would be the most advisable, since they offer more attractive interest rates and are supervised by the Bank of Spain.
In short, unifying the debts generates an unequivocal gain in the client that happens to pay a lower monthly fee, but also incurs expenses that must be taken into account when signing any contract.
Can I reunify my debts without mortgage / housing?
Of course you can do it, both banks and private equity entities can help you get the money you need, but by not presenting a home as collateral, you can not have the advantages obtained by formalizing a mortgage.
In the case of not being able to present a house as collateral, the entities will ask you to support the operation with sufficient income, have the necessary personal guarantees (pension plan, savings, deposits) or present a solvent guarantor.
With a non-mortgage loan you will have to settle for a repayment period that does not last more than 5 years, and some installments in which you will not notice such a large capital reduction. I would advise you to make a reunification of debts without a mortgage when you owe medium amounts, which come from loans with a high interest rate: credit cards, personal loans, car bills, travel financing, etc.
Although it is a non-mortgage loan, you will also have the advantage of paying lower interest and fees than if you were paying several of those loans in different entities.
The biggest risk that comes with reunifying your debts comes from the temporary space between which the existing loans are canceled and a mortgage is obtained. During this time, a promissory note with a temporary maturity and a guarantee on the home is signed.
If after the indicated period the new mortgage is not obtained, for any reason, the house would pass to the financial intermediary against whom we signed the promissory note. Therefore, it is very important to read carefully all the clauses of the bridge contract between loan cancellation and novation of new mortgage, and be very clear that our financial situation will guarantee that new mortgage.
It is worth remembering that many people have lost their homes for trusting too much financial intermediaries and not read carefully the fine print of the contracts they signed.