All of us at some time in our life have had to resort to asking for financing to be able to face the payment of a house, a car, an unforeseen expense that has caught us without liquidity, etc. The problem is that if we accumulate too many loans we find that debts take a good part of what we earn .
Faced with this situation, the reunification of debts emerges, which allows grouping several loans into one, facilitating the payment of fees by reducing the amount to be paid monthly.
It is an alternative that has advantages, but also some disadvantages, so today we will see everything in more detail. As well as the reunification of debts , a topic that will interest you if you are in some delinquent file.
What is and what does debt reunification consist of?
It involves collecting several debts into a single loan , which is generally going to be a mortgage loan. Why a mortgage? Simply because it is a more flexible and cheaper product.
How does it work?
To be able to group debts it is necessary to have a real estate property. What is done is to request a mortgage loan on it that includes the total amounts owed for different loans (mortgage, personal loans, revolving cards, etc.)
Once you get the money, you cancel all the previous loans and you keep one , the mortgage. The direct consequence is that the amount of what you have to pay each month drops significantly.
The main advantage we have just pointed out, you reduce your monthly expenses . This allows you to have more money at your disposal and even be able to save and invest those savings to get more money at the same time and be able to cancel the debt sooner.
Debt reunification has associated costs. On the one hand you will have to pay the cancellation interest of all the loans and the expenses of constitution of the new mortgage . In addition, if you use an intermediary you will have to pay a commission for their services that will be between 3% and 5% of the total amount of the operation.
Amortization time is extended
The term to pay a mortgage is always higher than the time to pay a personal loan. When you reunify loans in a single mortgage loan you will pay less, but it will also take you longer to repay the debt.
Can debts be reunited ?
The reunification of debts with defaults is possible , we will see it in a more detailed way so that you understand it better.
Options for the reunification of debts
1. Debt reunification without guarantee
If you do not have anyone who can guarantee you there is an alternative to reduce your risk profile, the most common is to include in the new loan your partner or a relative who has fixed and stable income.
2. Debt reunification without mortgage
If you do not have a mortgage you have more possibilities to group your debts even if you are in list. This is because the mortgage loan is usually the largest debt that is reunited, and in your case there will not be such a large debt, which decreases the risk of default .
3. Debt reunification without property
For the operation to be viable, it is normal for the debtor to have some property that can be mortgaged. It does not need to be your usual home, it can be a house in the town inherited from the parents or even a garage.
If you do not have properties that can be mortgaged, you have it more complicated to reunify debts, but it is not entirely impossible.
Negotiating agencies for debt reunification
Negotiating agencies are entities that are responsible for managing debt reunification. Their work implies saving you time and avoiding complications , since they are the ones who will be in charge of all the negotiation. It also implies a cost , since you will have to pay the corresponding commission for their services.
Reunify debts yes or no?
The reunification of debts is presented as a way of escape for many families who have hardly any liquidity at the end of the month. It is an option to consider, since the possibility of reducing the amount and the possibility of having more cash at the end of the month can become the escape for those who are drowned in their credits.
However, reunifying the debts consists in paying less each month, but does not imply that the amount to be repaid is less, since the repayment time will be extended. For this reason, our recommendation is that before deciding to carry out this procedure you go to an expert who analyzes your financial needs and helps you know if this system can really be beneficial for you and your family.