Warnings and recommendations of the Edict of Spain on the offers of “reunifying debts”
28.02.2006
SOURCE: Spanish Bank
A habitual example of debt consolidation
We add the loans that you have signed and join them in a Credit í nico. You will be able to pay less quota every month and have more money for your extraordinary expenses, only with the guarantee of your housing. So easy as to join all your loans in the only one. More money for less quota.
- It is habitual that an average family confronts, monthly, the payment of the quota of the mortgage of the house, that of the loan of the car, some personal loan, like that - like the debt for the balance dependent on the credit card, with which it is faced, throughout the month, numerous payments. The day agreed in the different contracts, the bank will load in the stated account the respective quota.
- In the last months announcements have proliferated in the means of offering to reunify all the debts and reduce the entire cost of the above mentioned financings.
- This debt reunification practice is not by no means novel. The banks, savings banks and credit cooperatives, for ages, before risks of non-payment or problems announced by his debtors to face to the fulfillment of his obligations, offer alternatives to his clients to modify the agreed payment conditions and to overcome a difficulty supervened at the time of satisfying his diverse payments.
- Nevertheless, the most novel of this practice, is that the advertizing offers of these reunifications are being realized, in most cases, by companies that are not banking institutions. In general, the work that these companies realize is that of intercoming up between the client and the banking institutions where the loans are had to cancel and with those who grant the financing.
- The formula usually consists of extending the existing mortgage loan or coordinates the new one, and with the new obtained funds to return prematurely the balances dependent on the rest of loans (personal, proceeding from the use of credit cards and, in case of a new mortgage loan, to cancel the previous one). This way - one happens to pay only one quota, instead of several as previously.
- On having usually been the interest rates of the mortgage loans minor than those of the personnels and those of the credits in card and, also, that the mortgage loans occur rarely they have a duration very superior to that of the personal loans, the quota to pay will be able to be lower than the sum of all the previous ones, although the term during which it will be necessary to be paying also will be top.
- It has to of be born in mind that these operations also have costs of procedure and formalization. This way - the early cancellation of the loans that are going to be replaced with the new one they will usually reckon in the contracts for the application of commissions or penalizations for the payment in advance and, in case of that they have mortgage guarantee, in addition to the above mentioned commissions or penalizations, a series of expenses (notarial, register them, to imposed and if it takes control of an agency, those of this one,). On the other hand, the hiring of a new mortgage loan, it will bear expenses (the previous ones, more a new appraisal) and commissions.
In the paragraph of this Portal referred to mortgage loans there is indicated by major detail the nature of these loans, the previous informations that the banking institutions, like that must give - like the commissions and expenses that they can support, being able to gain access also to the leaflets of tariffs of commissions of the entities for consular the maximum amounts that reckon to perceive for the different concepts.
- In case one comes to not bank company, the intermediation service will have a cost that, normally, will be in charge of the client, cost that will have to join the commissions that, as earlier have been mentioned, they could perceive the banking institutions in the cancellations and formalizations of operations, this way - how the expenses (notarial, register them, etc.) that they could have.
- By it, in order a suitable evaluation of the operation, there must be born in mind not only the difference of interest rates between the ancient loans that are replaced and the new one, but the term during which he goes to be paying and the entire expenses of the operation.
In any case it is suitable to request detailed information of all the costs that would bear the requested operation.
- To know if the one who realizes a debt reunification offer is a banking institution inscribed in the records of the Spanish Bank, from here - it can consult the relation of the entities inscribed in the above mentioned Records.
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