How to consolidate our payday loans?

The payment of the mortgage, of the car, of the electrical appliances, the purchases with a credit card, etc., can be added until taking us to a situation of over-indebtedness, of which hardly we will be able to leave. Having several credit fronts open, with different installments and different deadlines can become a headache. However, the current financial market offers the possibility of grouping all these debts into a single mortgage loan. Of course, we must meet an essential requirement, own a home or a mortgage that is in its final years of amortization. In the, we will know how to consolidate payday loans.

Where to apply for a home equity loan?

Both traditional entities and private equity companies market loans with mortgage guarantee, however, getting them in the first is much more difficult. The reason is that traditional banking assumes a lower level of risk when granting financing.

In this way, the banks of all the life, will grant loans with mortgage guarantee to those clients whose profile of risk is minimum, that is to say, that they count on high and regular income, stable work and of course that they are not in a file of Defaulters, such as ASNEF or RAI. So the conditions for accessing this financing are more rigid, but in return, the interest rates are lower than those we can find in private equity companies.

On the other hand, private equity companies do grant financing to consumers who have outstanding debts, so the requirements and demands of the lenders are, therefore, laxer than those of traditional banking. An example of this financial model is the loan with mortgage guarantee of SwitzerlandInvest , which offers amounts ranging from 5,000 euros to 300,000 euros, for a term of up to 20 years, from 8,95% TIN, provided that we have a home ownership or a mortgage with a value to be amortized lower than 30%.

How can a mortgage loan help us?

A mortgage loan can be our lifesaver, our last chance to pay off all our debts if the other options (negotiate with the bank to request, an extension of time, shortages, ask a family for money, etc.) have not gone ahead.

But we must be aware, from the beginning, that the risk of this product is double because a non-payment of their dues can result in the loss of our goods and our home. If we request this option, we will have to stop our consumption habits and not pile up more debts. If we assume these conditions, the loans with mortgage guarantee can help us a lot. Here are some of its features:

  • More liquidity month by month: by grouping the debt into a single loan with a longer term, we will have more liquidity each month. However, the total cost of the debt will increase because we will pay more interest for a longer time.
  • They accept ASNEF: this is a double-edged sword because, on the one hand, they allow us to access the financing if we have defaults and if we make responsible use of the credit there will be no problem. But precisely that they accept such a high level of risk also has great consequences if we fail because we can lose everything.
  • You can request high amounts, in some cases as in SwitzerlandInvest up to 300,000 euros.
  • They usually offer initial gaps: so that at the beginning we can pay only interest.
  • They have higher interests than mortgages or personal loans.

Therefore, before getting into debt and putting our home as collateral, we must exhaust other lower risk options, but if we do not have another option, we must be aware that we can not fail to repay the loan.

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