When a person / company seeks financing, he sometimes does so with this new loan to cancel debts. And is that loans to pay debts exist in Spain and can be processed in many ways, however, from advance we would like to explain the various ways you have to do it and how you should raise the operation before doing anything.
The first thing that the client has to do when looking to process a loan to pay off debts is to have a very clear financial situation. It is useless to call a finance company and explain what we want if it turns out that we are not even able to tell you what debt we have and we want to cancel.
There are several types of debts. Financial debts and non-financial debts. Here the client always asks for advice about what kind of debts it is better to cancel before and our answer is always the same, it depends.
Why does it depend?
It depends because it would be necessary to analyze in which situation each debt is located to determine which of them is the highest priority. Generally speaking, financial debt, that is, borrowing from other loans, is the first debt that we would recommend canceling as long as it is in arrears, that is, it is a loan that has been unpaid with what we can get into any of our loans. the existing delinquency records or that for cost interest to do so.
For example, if the person who asks for financial advice a large part of the financial debts that he has are in the form of credit cards, microloans… which, even though it is easy money, the costs are higher than the average of the loans, then one of our priorities would be the one to cancel these debts.
From advance we always recommend acting on the debt that bothers us the most, in the first place if we are in debt would be to eliminate the debt whose result has been then the Financial Credit Institutions, the reason, to be able to leave this list as it may harm us in the future.
From here it is convenient to make a proper financial planning to decide which debts are the following that we are interested in canceling.
In order of cancellation in advance we would do the following:
❶ Debts with finance and social security
❷ Debts whose final result has been the inclusion in the Financial Credit Institutions or one of these registers.
❸ Guaranteed debts.
❹ Loans with high costs.
❺ Business or professional debts.
❻ Family debts, among friends…
Now, with that said,
What kind of loans to pay debts exist in the market?
Within the current financial market you have to know that there are a multitude of financial products destined exclusively to cancel debts. This is so because with the crisis in our country both banks and especially alternative financial institutions have discovered the need to have one of these services in the portfolio due to the demand that there may be, which in situations of economic crisis is a lot.
Perhaps today the loan more used to such situations is the grouping of loans or debt consolidation.. On this loan have already spoken on occasions since our company, in fact it is one of the loans we sell.
The main feature of this loan is that it is usually used to cancel other loans or debts that the client may have with the new loan, leaving it in a more optimal financial situation. When it comes to other loans what the client wants is called “Loan Grouping” and when they are non-financial debts of all kinds such as with social security, finance, business suppliers then “debt reunification”.
Both are processed in a similar manner, the only thing that changes is the type of debt that is intended to be canceled. (one is financial debt and the other is not)
The grouping of loans is usually useful when the client who requests it has loans with a high cost such as personal loans, credit cards… never a mortgage. The client who requests a group having a mortgage which he wants to cancel does not know what he is requesting since the mortgage never makes sense to include it within the group, since by cost it is the cheapest loan currently available.
Another of the usual mistakes of the clients is that sometimes they try to raise a group through a personal loan. Currently no financial institution transacts these operations if the client does not endorse any property, because the management and work associated with this loan is excessive and then have to process it as if it were a personal loan.
In personal loans, the study of the operation can not be carried out as if the other loans were to be canceled, but the analysis is made as an increase in indebtedness unlike the “Agrupación” loan, which, if it contemplates the elimination of the others quick credits
Another loan we can talk about is the ” loan to cancel debts “. Not all financial and companies dedicated to the financial sector have among their products one of this type. It is similar in some things to the one of grouping with the difference that usually the client requests it when it looks for to cancel some debt in particular. It does not want the grouping or reunification of many debts but of one in particular. Here, a guarantee is also required for the same reason and in fact this operation is usually raised when the client is also included in the delinquency record.
Another possibility that the client has to pay their debts is to try a mortgage extension. This option, even though it is banking (banks process it) is a possibility as long as the client knows how to manage it well. Banks do not usually like to cancel the debts of other financial entities, but if we know how to “sell ourselves as customers” this can be a good solution.
This operation is also a possibility when the client seeks to group and consists basically of the financial institution we extended the mortgage loan we have for this money to cancel other loans. Keep in mind that if we cancel other loans with the mortgage (micro loans, personal loans…) what we are doing is improving our level of solvency since it is not the same as the fee that has to be paid in case of a credit card that the of a mortgage, therefore, the bank may also be interested that our solvency improves considering that we are your customers.
What is the problem here?
Apart from the fact that banks do not like this kind of operations, it is the fact that it is very difficult to convince the entity of the benefit of being more solvent. Today we may be his clients, but maybe tomorrow we are not…
In conclusion, although there are many other types of financing to pay debts these are the ones that we would recommend directly from our company to process both the probability of success and the benefit obtained by the applicant.