How to reunify debts?

There are many announcements that can be seen today, by banks and credit entities, offering to reduce the monthly payment of loans through the reunification of debts. The premise on which they are based is to gather or gather everything that a specific person owes in a single entity, so that the fee derived is less.

The product of this service is aimed at responding to the needs posed by those individuals who encounter significant difficulties when dealing with their debts. On many occasions, mortgages accumulate, as well as personal loans , interest on credit cards or other debts that can be too much for an individual who, at the time of requesting them, did not perform his calculations correctly and is in a borderline situation. This can lead to the person in question being in debt to multiple creditors.

In these cases, debt reunification can be a great solution. This mechanism offers the client the possibility to respond to a creditor only for the total debt owed at that time. In addition, the process of renegotiating the loan conditions will be much more feasible, being able to obtain more interesting installments than if it were many creditors.

However, it is necessary to emphasize that sometimes said product could create even more damage to those customers who are in a weak financial situation. Debt reunification can lead to longer repayment periods or higher interest rates than would be paid to original or first creditors. It is very common that in the first months after reunification the cost decreases, giving a small cushion to the debtor, but that as the years go by, the situation reverses and returns to the situation of the beginning. Therefore, you have to know the whole process to do it correctly.

As we mentioned, there are several reunification formulas that we can find today. All of them are used by both credit institutions and companies specializing in reunification. Here are some of the most important ones. Whatever your choice, reunifying debts with Credit Checker is a safe bet:

Non-mortgage reunification

Personal loans (reunify debts without a mortgage) is one of the most used methods to reunify debts. In this case, one of the products must be requested for the cost or total value of the debts accumulated at that time. With this, it would be enough to terminate all the loans that the individual in question had previously subscribed.

For this, the client must assume, as is reasonable, the total cost of the new loan, with its new interests. In addition, the conditions of those that will be liquidated soon should be reviewed.

There are many financial products that entail cancellation or subrogation costs, so there is a contract obligation to respond to the interest that the client has agreed to pay in those cases in which it was previously canceled. For this reason, it is possible that when the debt is regrouped, the cost to pay will grow significantly, since it is necessary to add the additional expenses of the cancellation interest.

This formula is usually accepted in small debts, and canceled in those that have a greater value. There are very few credit institutions that can lend money to a specific client who is not in possession of property and who is also in difficulty to pay previous loans . Therefore, reunifying debts without a mortgage is a tool that should be taken into account.

Reunify debts with a guarantor

If you have a guarantor, this situation changes radically. If a third person is in a position to respond, with their income and assets, to the debts of the debtor, the bank can change its opinion drastically.

For this, the guarantor must present a magnificent solvency. However, the risks derived from this operation also have risks, since there is the possibility that in some month the agreed quota cannot be met, and the debtor would have the right to act against the guarantor.

Mortgage reunification

This is, without a doubt, the most used mechanism that individuals use to regroup their debts. This takes advantage of an opportunity offered by the Spanish housing market, as 84% ​​of Spaniards own their own home in which they reside. This fact offers the possibility that many individuals can offer their home as a guarantee of payment in those extreme cases in which the monthly payment of the debt cannot be met.

In these cases, the process is based on the request for a mortgage using a home owned by the debtor. With the amount obtained after this process, the debts that may have been acquired through other channels are canceled.

All mortgages generally have better conditions with the debtor than personal or consumer loans . This is based on the fact that banks are sure that, if the client could not meet these payments, they could use the house as collateral.

Therefore, this option will only be available for those cases in which the debtor owns a home and does not have a mortgage previously. If the remaining mortgage is very small, this mechanism could also be adopted. It is tremendously interesting since the payment conditions improve substantially. However, special attention must be paid to the expenses that may be created additionally.

When planning the details of the operation, not only the expenses derived from personal loans should be taken into account, but all those that the constitution of a mortgage entails, such as the property registry, the notary, the agency or taxes. In addition, there are other obligatory ones related to loans such as Home insurance, or Life insurance (mandatory in many cases).

In short, this debt reunification process has the ability to get much more advantageous conditions when it comes to dealing with debts. However, there are cases in which the total amount could be increased. The final interest and additional charges of the contracted mortgage can differ greatly depending on the bank in which the operation is carried out.

Reunify debts with personal loans and mortgages

If what is intended to request is a personal loan (reunify loans ), the client may be interested in doing it directly, without the need to resort to third parties. There are currently tools, such as the personal loan comparer , that allow you to compare numerous offers from different banks and other credit institutions.

If you decide to reunify debts through a mortgage loan, there are also mortgage comparison tools. In them you can analyze the conditions and interests of the banks. Reunifying loans is a tool that can save you great money.

Don't think twice and decide to reunify debts with Credit Checker . You will not regret.

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