Have you had a lot of debt accumulated over the years?
Would you like to be able to reduce all the payments you have monthly and reorganize your loans, but you don't know how to do it?
The reunification of debts is the solution to face this situation, being able to have a single monthly payment, although it is advisable to understand what it is about and know its advantages and disadvantages. Next, we are going to explain what are the pros and cons of loans for debt reunification and what is the best time or situation to apply for them.
What is debt reunification?
Debt reunification is a system that serves to group all your loans into one, slightly increasing the installment of payments.
In other words, it is about slightly increasing the total amount you have to pay or, the second option, increasing the time to pay your debt (or a combination of both).
But, how can we know if debt reunification is the best option for all individuals or companies that are too in debt?
The answer is simple, it will only be if doing so allows you to pay a lower fee each month and reduce the debt you have in a real way.
Problems in the reunification of debts
The biggest drawback that individuals and companies face when reunifying all their debts in a single loan, is that they tend to lengthen excessively over time.
As it takes much longer to repay the total debt, the interests also increase considerably, so the final amount ends up being much higher. For this reason, it is necessary to study each situation precisely and assess whether, with all the added interests, the fact of using debt reunification will compensate us or not.
However, it can be a good option for companies and / or individuals who have short-term debt problems , and do not see another possible alternative. In these situations this type of financing can be really useful.
What are the steps to follow to reunify debts
Next, we are going to detail what are the necessary steps that you must follow to know if in your case it is advisable or not to reunify the debts. At tzedakahhouse.org, we follow these same steps to determine the viability of loans.
- Specifically identify each and every one of your loans, debts and lines of credit that you have in force. It is essential not to miss one, such as debts you may have with Social Security or the Treasury, deferred payments with suppliers or clients, or personal or professional loans, among others.
- Calculate the money of each debt independently. Examine the different amortization tables to know what you have to pay in each case, including interest. Then, you must calculate your level of debt and what you have already returned in each case.
- Use the loan simulator, a tool that will help you calculate what your debt reunification options are and which is the most optimal and viable according to your case. It is necessary that you bear in mind that the reunification of debts also generates additional costs, such as commissions for early cancellation of loans or notarial costs. Once you have applied for the new loan, you will also have to pay an opening commission. If you make use of a loan simulator, you will be able to incorporate all this data and obtain the most reliable help.
- Go to your nearest bank. This is recommended in case we have different loans signed through banks and we are thinking of carrying out a debt reunification. In these cases, it could be that the bank itself, after knowing the current situation, offers us an alternative. If it is not possible to go to it or they do not offer us any way out, the best solution is to resort to private financing, as we will see below.
Reunify debt through a mortgage loan
Not only is there the option of being able to reunify debts through banks, but it can also be done by signing a mortgage loan. In the case of banks, it is unlikely that they will agree to initiate these operations if the debt is very high.
Mortgage loans guarantee a loan operation using a property, so they offer the creditor a lot of security. This is because real estate tends to be assets that do not lose value and the creditor feels safer knowing that the loan that will be delivered to a third party is secured by a property.
To go to debt refining through a mortgage loan, you can go to investors or private lenders who may be interested in this type of operation. In fact, this is the base of operations at tzedakahhouse.org . Then we will detail the conditions of access and return of our debt reunification loans.
Private loans for debt reunification
tzedakahhouse.org is specialized in the study and opening of mortgage loans for the reunification of debts, either for companies or for individuals . In order to have this type of loan, it is essential to have real estate and meet the following requirement: that the loan that is granted is for a minimum value of € 20,000.
Access requirements to our loans
Next, we will see in more detail what are the essential requirements for applying for a debt reunification loan:
- Have a real estate property : it is the guarantee that guarantees the loan. This can be a property of any type, such as a house, a flat, a commercial premises, a hotel, a garage, among others. The only thing that is not accepted for this type of operation is the land. To verify that the person requesting the loan actually has a property in their name, it is necessary to deliver the simple note from the Property Registry. It is also important that the property in question does not have any debt or mortgage. In the hypothetical case that a considerably small debt weighs on the property, the initial amount requested for the loan could be increased, and thus be able to cancel said debt.
- Request a minimum amount of € 20,000 : it is the second and essential requirement to request a loan through tzedakahhouse.org. The maximum amount is considered infinite because it depends on the appraised value of the property being guaranteed. Therefore, the higher the market value of the property, the greater the amount of money that we can have. Note: it must be borne in mind that amounts that exceed 30% or 40% of the appraised value are never delivered, in order to protect the interests of our lenders if a default occurs.
Conditions for the repayment of a debt reunification loan
Financing that comes from private lenders offers us the advantage of having a wide flexibility to repay loans.
The interests tend to be a little higher than those of the banks, but in return they provide us with this flexibility and, in many cases, they are the only option there is when you cannot go to banks or when there are complex economic-financial situations .
The conditions to be able to repay our debt reunification loans are:
- Interest between 9% and 12%: the interest rate that is applied in each case depends on whether an individual or a company requests it, the amount of the loan, the type of installment, its duration, as well as well as the risk of the operation.
- Four types of installments to choose from: the applicant can repay the loan through monthly, quarterly, semi-annual or annual installments, depending on their needs and their situation.
- Two types of amortization: you can choose between a French amortization, where the installments are linear and equal during the life of the loan, or an American amortization, where only interest is paid in installments and the principal is returned with a single final payment .
- Between 1 and 10 years: the duration of the loan can range between 1 and 10 years. Waiting periods may also be granted as long as the applicant's financial situation allows it.
- Signature before a notary: any loan from tzedakahhouse.org is signed before a notary and following law 5/2019, the same that regulates mortgage loans. Therefore, to obtain a debt reunification loan you must have a notarial deed.
- 100% online operation: the entire process is carried out online to facilitate operations. The presence of the applicant is only required to sign the deed at his trusted notary's office.
Contact us now
You can contact tzedakahhouse.org through our contact page, by phone or via email so that our agents can contact you as soon as possible, and thus proceed to analyze your situation.
Our study for the debt reunification loan application is completely free.
tzedakahhouse.org is not an instant and fast loan company, but we take care of conducting feasibility studies of all operations.
It is important that you bear in mind that, if the applicant cannot justify his income path through wages, salaries or income, he will not be able to access financing. We do not open lines of financing if we see that the operation is unfeasible or the applicant may lose their property. We take care to offer solutions, not to aggravate existing problems.