Category Archives: Lower Payment

Consolidate payday loans – Pay less every month

Reuniting debts will allow us to save the most important thing: our house. On this page, you will find everything related to the reunification of your debt, although we also recommend that you read the following free guide where different scenarios and resources are presented in case you can not pay your mortgage.

What is the reunification of debts?

Payday loan consolidation loans mean uniting all loans that we have in force and putting them together in a single loan, whose amount will be the sum of all loans- site . The main advantage of this operation is that the loan can be paid in a long-term and, sometimes, with a lower interest rate. In this way, the monthly payments will be lower each month, although we will take longer to amortize the debt and, consequently, the total to be paid in interest will increase.

How to reunify debts in a single installment?

We have two options for grouping debts in one installment :

  1. Preferably go to a bank or financial intermediary and explain the situation.

  2. There is also the option of private capital. In this case, it will be essential, on the one hand, to be sure that we will be able to respond to the debt, since, otherwise, they will not hesitate to initiate an attachment process. And on the other hand, we can count on professional and personalized advice. It can be an economist, a lawyer or any other professional specialized in finance.

How much does it cost to group the debts?

The reunification of debts is not, far from it, a free operation, because to carry it out you have to pay the corresponding formalization expenses, commissions, taxes, etc. On certain occasions, these costs are financed with the amount of the mortgage, something that will prevent us from having to immediately disburse a large sum of money.

This is the expense involved in reunifying debts:

  • Commission for cancellation of the mortgage: ranges between 0.50% for the first five years and 0.25% for the rest of the years.

  • Cancellation costs: among which include notary, agency, property registry and other concepts. Between 600 euros and 800 euros.

  • Commission of the broker or financial intermediary: it depends on each agency, but the cost is usually from 3%.

  • Opening commission: of the new mortgage between 0% and 1%. Up to 1,000 euros for every 100,000 euros.

  • Opening expenses: must be paid to the agency, the notary, the registry and the appraisal). Approximately they can be about € 1,000 for an average mortgage of 150,000 euros.

  • IAJD (Tax on Documented Legal Acts): this will depend on each autonomous community, but the amount is usually more than 1,000 euros.

Keep in mind that these expenses are approximate and will vary according to each mortgage and bank.

Advantages of debt reunification

The reunification of debts can be helpful for those people who have been accumulating debts with the bank and prefer to group them all into one in order to have a better control of payments and thus reduce the total to be paid each month.

If we opt for the reunification of debts we can benefit in:

  • Lower payment: this is one of the main reasons why families consider regrouping debts since we will pay less per month.

  • A single mortgage loan: this is the main advantage of the reunification of debts, all debts are grouped into one.

  • Less interest than if we apply for a personal loan since they have higher interest rates than mortgages.

  • We can determine the repayment term, depending on several factors such as age, the pending termination of the mortgage, among others.

  • It is our last chance to leave our debts to zero.

Disadvantages of debt reunification

The main drawback is that in the end, although the reunification of debts may be attractive at first sight, we end up paying more for several reasons:

  • Interest increases: by increasing the repayment term interest also increases, therefore we pay more.

  • We will pay more commissions: we will have to face cancellation fees, constitution, among others.

  • The total debt increases: the reunification of debts will allow us to face our debt, but this will be greater.

  • We can lose our home: if we do not change our mentality with regard to money (stop compulsive buying, abandon financial excesses, among others), and if we do not look for new sources of financing.

Can debts be reunited while at ASNEF?

Yes, but the process is more complicated. Those people who have debts or appear on a list of defaulters such as ASNEF or RAI will have very difficult access to a debt reunification. However, there are financial intermediaries or brokers that with their help we can unify in a single debt everything we owe the bank.

Financial intermediaries or brokers have the following way of working:

  • They do not care if you are included in a list of defaulters.

  • They cancel the debt that caused the inscription in the delinquency lists.

  • In general, they usually charge a high amount for their operations.

Can debts be reconciled without a mortgage?

Yes, In principle, the reunification of debts in a single loan without mortgage guarantee is a possible operation, although in practice it is complicated given that not all banks facilitate this grouping. In addition, it is possible that if we do not have any mortgage loan, we have to provide some other additional guarantee such as the following:

  • Avalistas whose assets are enough to assume the debt.

  • Balances in sight accounts, deposits, low-risk investment funds or pension plans.

  • Pawns of family salaries.

What else should we know before grouping the debts?

Although we have already explained what is the reunification of debts and all the advantages and disadvantages that it reports, it is worth bearing in mind the following aspects before grouping:

  • Search in more than one entity at a time: at least three to be able to compare and choose offers and not to run out of options, if anyone tells us not to. One tip is to use a mortgage comparator to find the best offer that fits your financial profile.
  • Look at all the conditions of the offer: fees of intermediaries, commissions, among others. Not only in the interest or the quota, since it is an operation of great transcendence, which will condition our family economy for many years.
  • Always ask for a forecast of expenses and commissions in writing (with intermediaries and banks).
  • Check that the new quota does not exceed the sum of the current payments.
  • Try to negotiate the maximum of conditions.

We must know that unifying all our debts in a single loan can bring us great advantages if we do so with discretion since choosing to reunify debts is a serious process. We must remember that this will be the last opportunity that the bank will lend us so that if we miss it we can end up losing everything.