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