Most Spanish consumers were forced to resort to a loan bank or any credit extent. The acquisition of a house, The reform of a floor or the purchase of a car These are situations in which it is almost inevitable loan to deal with the cost of these goods and services.
There are also Minor expensessuch as the purchase of a device or the need to postpone our expenses at the end of the month, in which citizens Consumer loans or loans are expelledwhich inevitably implies payment of interest.
In both cases, It is essential to religiously respect the established payments Because otherwise our personal finances could be seriously affected. And it is that when the debts accumulate gradually before our inability to face them, the so called ‘Snow ball effect’.
If at a certain moment we are very highlighted by the payments that we must suppose, a solution may be what is called how Debt refinancing.
“The refinancing of the debt is the process through which a person or an entity Renegotia the conditions of their existing debts With the aim of obtaining more favorable terms. This implies altering the payment conditions of existing financial obligations, such as loans or credit cards. In addition, it usually includes the expansion of the payment period and the reduction of amounts, which can provide immediate financial relief, “he explains Santander Consumer BankCompany specialized in the financing of consumption.
This expert source warns, however, that the new agreement “It does not imply a reduction in debt” And that in the end the total payment will be greater. However, “It is preferable to refinance the debts as soon as there is a risk of non -compliance ” To avoid paying off to recovery company.
By the financial comparator Helpmycash They specify that, in addition to alleviating your finances, this resource can be useful in moments when interest rates have decreased. “Imagine You have hired a loan a few years ago with an interest of 10% Because it was what the bank offered you at that moment. If the credits granted by the banks are now cheaper, you can refinance your debt to adapt it to the current market price and pay less every month “, they recommend.
Three types of refinancing
To start refinancing, says Santander Consumer Bank, “Banks usually require the payment of the last defeat fee” And then, they adapt depending on the income and history of the history of the person. “The interest rate of the refinanced debt depends on the terms agreed with the financial entity e It is usually higher, although with more manageable payment conditions. ”
The refinancing of the debt can be done in three different ways. So, there is the Noveltywhere the loan conditions are renegotiated with the same financial entity. “This process may include changes in the interest ratethe deadline of the mortgage, or both, often involves expenses like Banking commissions and notary expenses“, Clarifies Scb.
On the other hand there is the Debt -handing. This option “implies the consolidation of several loans and mortgages in a single loan with better conditions, resulting in a single monthly fee generally lower than the sum of the previous individual shares”. This process can lead to a file Increase in the depreciation period and, therefore, in the total cost due to interest.
Finally, you can opt for the Subrogaciónthat “allows you to change the banking entity if the current one does not access the renegotiatory the conditions of the loan”. This method can offer advantages such as lower interest rates o longer amortization deadlines, but also involves expenses such as subrogation and evaluation commissions.
