Grouping of loans and the reunification of debts

Many are the ones who ask us about the grouping of loans or grouping of debts being the reason why we write this. Because at least with us if you want to process the grouping of credits what you must do is process the mortgage loan.

It is through these credits with endorsement how you can get group debts quickly and easily, and above all, with the best possible results. It is of little use to process this financing operation if, afterwards, we do not get what we want, which is ultimately to save money.

Loan grouping What does this process consist of?

Loan grouping What does this process consist of?

Basically the clients what they are looking for here is to gather or group all the credits and debts that they have by passing it all to one. The objective rather than to group is to save money every month since it is assumed that the new financing will have better conditions than the previously signed loans.

That is why from Father Brown we say that it does not always make sense to group credits. It does not have it because if the credits that we want to cancel have better or similar conditions than the new one, little will be noticed. If it is possible that through the new financing we get a longer term but it depends on each one if only based on this it deserves or not worth it.

Reasons to group loans

Reasons to group loans

We have already seen the two main reasons why people want to process this operation.

  1. Get a savings in the monthly payment to pay: Do not sound like the “Reunify / group your debts and save up to 50% of what you pay.”

They say it because in most cases it is true, through the grouping of loans people can achieve a really important savings. Now, what can not be is to always ensure that these are the expected results. As we have said before, we can not always advise taking a group of credits. Therefore it is understood that we will not always obtain the results we want, it is more, in some cases it may even be counterproductive.

  1. Collect all the credits and all in one: Does not it bother you to have many credits each with their respective conditions and terms in different financial?

To most people this usually bothers him being the reasons more obvious. On the one hand because management is not easy at all. Take, for example, 6 loans in 6 different financial companies, each of them with different terms to make payments, interest rates… it is not easy to manage. Most are much more comfortable having to control a single financing than having to do it with many options at the same time. Even so it is a secondary reason in comparison with the one of the saving.

How to process a grouping of credits and obtain good results

How to process a grouping of credits and obtain good results

Because of course, if we manage it as it is not due, it is certain that we will not obtain any results. At least it is certain that we will not achieve the results that we can consider as better. From our point of view, grouping loans should be processed as follows:

  • Before applying for any new loan we have to know the conditions of the ones we already have.

We will only see if it has sense or not to take this management if we previously know the financial cost of those already signed. If you do not know this information, we advise you to obtain it before doing anything.

Does it help to cancel a cheap loan if the new one has worse financing conditions?

Does it help to cancel a cheap loan if the new one has worse financing conditions?

And this answer will only be obtained if you have previously analyzed all this.

  • If the credits you want to cancel through the group have a higher cost than the new one, if management can make sense.

But, what about the increase in indebtedness?

But, what about the increase in indebtedness?

Because of course, the signing of any new credit supposes an increase in the indebtedness of the person. Unless the cost difference between the new and the old credit is very large, it is something we should consider. The signing of new mortgage loans for example supposes, among other expenses, those of appraisal, notary, taxes, agency, study commission, opening….

When the person who wants to group debts is looking for small amounts it may be something that in the end is not worth it.

  • If you want to group debts it is always advisable to try to sign in the long term.

Because not everything is the interest rate that the financial puts. The term in these amounts plays a fundamental role. It is not the same to sign a short or medium term loan as to do it in the very long term. That is why it is always profitable to cancel personal loans without a guarantee for a mortgage loan.

This is because the terms of loans without collateral are usually short, less than 5 years in most cases. In contrast, mortgage loans can be signed at 5, 10, 15, 20 and even 25 years, making a big difference.

It is possible to make a group of loans without endorsement

It is possible to make a group of loans without endorsement

By power we have to say it is possible but it will only be for small amounts of money. And you will not be really processing a “group loan” but you will be signing a loan without normal and current collateral.

You will probably sign one in which the indebtedness of the person asking for the money is not taken into account too much. As such there is no group of loans without endorsement, there is not because financial companies simply do not want to offer it. Not only are they slow loans whose processing is also very laborious but also the risk of default is high.

What conditions and requirements do credits usually have for grouping debts

What conditions and requirements do credits usually have for grouping debts

That not all the loans seen in the market are used to group loans is a reality. That is why we want to show you the characteristics and requirements of these credits.

  • They are loans where you need to provide endorsement, a property in addition.

Vehicles or other guarantees do not work in order to process the financing.

  • The loans are always signed in the long term. This is how the fee to be paid is reduced as much as possible.
  • The property provided as guarantee must be free of charges.

It is possible to make a mortgage loan when the property has loads but it is unlikely.

  • They are the private financiers as well as companies of private capital who are specialized in carrying out this type of financing.
  • The amounts processed are usually medium and large.
  • This financial operation is almost always processed when clients can practically no longer face the debt they have.

When we must process a debt grouping

Because as we have said in advance, its processing is not always justified. For example, canceling a bank mortgage for a private one does not make sense. Only when there is no other option to get the money or when the first is unpaid can you have it.

Here are some of the reasons for processing a loan pool :

  • Do not arrive at the end of the month for the amount of loans and fees you pay? What you need is a reunification of debts, no doubt about it.
  • Do you have difficulty managing the payment of all the credits you have? For this type of situation the grouping can eliminate the problem.
  • For when you want to sign a new loan having already a level of indebtedness more than considerable.
  • If you want to improve the financial solvency of your business this will also help you.

Loan with 120 Months Term – with Instant Confirmation – Small Monthly Installment

What do you expect from your 120-month loan? A quick and easy application process, a quick loan decision and the low-interest financing of a larger loan amount?

Long maturities promise to pay off big loan sums in small installments. Modern application procedures are fast and convenient. With information and suggestions we would like to achieve that you finance cheap.

Find out what loan offers you expect and how to save money. Also, why 120 months maturity for loans in difficult cases is not always optimally chosen.

Loan with 120 months term – target small installments

Loan with 120 months term - target small installments

A loan with a term of 120 months nobody takes “just in between” on, in order to fulfill an ordinary consumer desire. For ordinary consumption, up to the purchase of cars, installment loans with medium maturity serve. Loans with very long terms complete borrowers who move larger sums of money. It would be conceivable, for example, to invest in stable assets.

Not infrequently there is a desire, after a realignment of the current loan obligations, behind the loan search. All in all, existing installment loans exhaust too much liquidity. The household budget becomes inflexible. In most cases, to balance the Dispo grows to an uncomfortable level. A financial liberation, especially in times of low interest rates, seems sensible.

By repaying the entire debt, now in 120 small monthly installments, the budget would again gain more scope for everyday needs. Perhaps even the fulfillment of a long-delayed wish to co-finance the same. Basically all good reasons to get involved in a loan with 120 months maturity. Damage can be a free offer comparison no case.

Long-term bank loan – offers

Long-term bank loan - offers

Overall, the trend in the German loan market is towards higher loan sums and longer maturities. This is noticeable in the comparison of previous loan offers with an excessively long term to today’s range. Good free loan comparisons show significantly more loan offerings with 120 months maturity than ever before. It is no longer just civil servants who are free to use long-term low-interest loans.

Currently there are 7 offers in the Creditend loan comparison, for example, if you are looking for a loan of € 18,000 with a term of 120 months. With regard to earlier loans, the interest rate level has also dropped significantly. Installment loans with a term of 10 years are now offered by banks that do not specialize in particular interested parties. Almost half of the loans are even offered for loan-independent lending.

120 months term – favorable financing costs?

120 months term - favorable financing costs?

With a long term interest rates have a significant impact. The currently lowest-interest loan with a term of 120 months costs 4.44 percent APR. (2/3 loan example Creditend). A total of 18,000 euros net loan amount at 10 years would lead to a borrowing cost of 4,232.25 euros. For the monthly installments would be 185.27 euros apparently very low.

The same net loan amount at 86 months, again financed at 4.44 percent APR, shows the effect of compound interest. The pure loan costs are reduced to 2,913.21 euros. A savings on the loan with 120 months duration of 1,319.04 euros. To save this money would have monthly only € 63.70 additional installment – monthly rate € 248.97 – be portable.

At the same time, the loan with a reduced term would no longer necessarily be the cheapest loan offer. For loans with an 86-month maturity, the 2/3 example currently shows 3.29 percent APR as the lowest-interest financing offer. At a monthly installment of € 231.23, the pure loan costs could be “melted down” to € 2,143.44.

Compared to the lowest-interest loan with a maturity of 10 years, a savings potential of 2,088.81 euros would be feasible. Additionally shouldering 45.96 euros monthly rate, pays off in terms of these numbers startlingly.

Loan debt restructuring in difficult cases – problem definition

Loan debt restructuring in difficult cases - problem definition

Low lending rates make it easier to get into debt. Almost always, modern consumer wishes can be met comfortably on loan. Smaller sums unnoticed funded the Dispo. Often tacitly citizens live about their circumstances. Of course, the “income gap” has a share in this development. Small and medium incomes are just enough for the “necessary”.

The trend reversal is to bring about a loan with 120 months duration in difficult cases. All liabilities are summarized in the debt repayment loan. The repayment in small monthly installments creates the scope to maintain the usual quality of life. Unfortunately, in these cases it often happens that the personal loan rating for lending has already suffered at this stage of debt.

Only a few banks are willing to take on the risk of being granted very long-term financing, with a somewhat weaker loan rating. The risk compensation, within the tight tolerances of legal requirements for safe bank loan, create interest premiums. Risk loans are more expensive so that the bank can create reserves for the expected higher number of loan defaults.

Do not lose sight of financing costs – think about the term

Do not lose sight of financing costs - think about the term

loan with 10 years in difficult cases is recognizable more expensive. There are no alternatives for a private loan, for example, if you have 120 months to repay the loan. As a result, banks, such as Eifel Bank, play a special role. The few providers of risk loans have almost a monopoly position, which is ultimately reflected in the cost of loan.

For the exemplarily mentioned 18,000 euro loan with 120 months running time, would calculate by food bank, according to 2/3 example, 9,12 per cent effective annual interest. The monthly installment shows the representative example with 225.68 euros. From this installment, the total repayment of 27,081.76 euros for 18,000 euros net loan results. For the approved loan with 120 months in difficult cases, borrowers contribute 9,081.76 percent financing costs.

In other words, one third of the repayment is interest costs. In the face of such high costs, the question arises again whether 84 months are not enough. The monthly rate at 84 months, the same loan volume and interest rate, is 287.41 euros. The loan costs would be, in direct comparison to the loan with 120 months duration, reduced by 2939.12 euros.