The debt consolidation loan is a single financing solution to solve the economic difficulties due to multiple monthly installments to be paid. With this financing solution it is, in fact, possible to combine all the installments in a single installment that includes all the loans but reducing the amount that was previously paid and lengthening the amortization plan.
The debt consolidation loan can be applied to personal loans and ongoing mortgages, also allowing you to get an additional liquidity to support other incoming expenses. Let’s see together the details of this particular type of financing that can be requested to reduce the amount of monthly debt created by more than one loan that can include a loan or a mortgage: here is all the information to request it, evaluate its advantages and disadvantages in costs.
Mortgage consolidation loan, loans and added liquidity: WHAT IS IT?
Debt consolidation mortgage is a new loan. The bank that offers this financial product evaluates the total sum that the customer who wishes to access this personal loan solution still has to pay and for how long (the amortization plan). Following an initial assessment of the total monthly sum to be paid, the sum of the installment that the subject can actually pay monthly on a regular basis is valued to revive his economic position.
The bank calculates the maximum transferable amount of the customer’s remuneration and arranges a new installment based on a new repayment plan. With the debt consolidation loan there will be only one monthly installment which includes all the loans in progress, taking the longest period of one of the loans taken as amortization plan. With this type of new financing, it is possible to revise one’s condition and financial statement and pay the due installments regularly.
Mortgage consolidation loan, loans, liquidity: WHEN TO REQUEST IT?
Mutual consolidation must be requested when it is realized that you are borrowing. This refinancing solution cannot, in fact, be accepted by customers who have not already incurred penalties for non-payment, in surcharges or have a lawsuit for insolvency in progress. The loan and mortgage consolidation loan allows us to revisit our economic condition when it is difficult to pay all the monthly installments but not when an insolvency lawsuit has already started.
Mortgage consolidation loan, loans, liquidity: WHAT TO CONSIDER?
The first factor to consider before requesting mutual consolidation, both for current loans and for your mortgage, is the applied interest rate regime. There is no doubt that the rate of this form of refinancing is higher than the other forms of personal loan but it allows to modify and improve one’s own economic condition without incurring in penalties. The total monthly fee that would be paid by counting all the installments is renegotiated, ie a monthly sum is recalculated that the customer can actually pay based on the current financial situation; the total amount is reduced and included in a single installment with a longer repayment plan.
PLEASE NOTE : consider that if you have different loans in progress or you have a loan for the purchase of a first home and a loan to pay the amount requested by the bank for the down payment and taxes, the initial amortization plan is very long (up to 40 years for some types of loans) but can still be redefined due to its financial resources.
Mortgage consolidation loan, loans, liquidity: TYPES
On the financial market there are different types of debt consolidation based on the purpose for which they are chosen. As a rule it is possible to choose between three types of consolidation loan in relation to the new loan to be requested and to the forms of loan that are in progress:
- mutual consolidation for loans and mortgages;
- mutual consolidation for personal loans;
- mutual consolidation for loans, mortgages and additional liquidity.
Mortgage consolidation loan and loans: CHARACTERISTICS
It is the most common mortgage consolidation solution, one for which a customer requires a mortgage and a personal loan for the purchase of the first home. The bank, in fact, for the acceptance of the loan for a property provides up to 80% of the total cost of the building and this means that to buy, renovate and recover a building it is necessary to have the 20% missing to support the total costs of the interventions and additional expenses, or taxes and the cost of the notary for the deed of sale and the same documentation for the subscription of the loan.
If you do not have the 20% sum, you can request (if this is the possibility that this second loan is granted) another personal loan. This is where the customer who intends to buy a home has a mortgage and a personal loan at the same time; will have two monthly installments to be paid which could become high with the addition of other expenses (for example, for example the birth of a child, a child who enrolls in university, the necessary purchase of a car, etc). The solution to solve this type of unexpected and financial is to choose the loan consolidation loan and mortgages, allowing you to combine the amount of the two installments in a single monthly installment, calculated on the basis of the maximum transferable amount based on your salary and total expenses, with a lengthening of the amortization plan.
Mortgage and loan consolidation loan: TABLE
To better understand and summarize the mutual consolidation solution for loans and mortgages, it is advisable to also observe the following table which proposes a simulation of financial difficulty during the payment of the first home loan and a personal loan:
|FINANCING IN PROGRESS||INSTALLMENT AMOUNT||LOAN MORTGAGE CONSOLIDATION AND LOANS|
|PERSONAL LOAN||200 USD||REDUCED INSTALLMENT|
|MUTUAL||450 USD||REFUND PLAN EXTENSION|
|TOTAL AMOUNT OF MONTHLY installments||650 USD||400 USD|
Mortgage consolidation for loans: CHARACTERISTICS
It is the most widespread solution among young people or young couples, that of having more loans in progress, especially small loans, which at the time of subscription provide for small monthly installments, small amounts, some even at zero interest, but which together collectively they constitute a total sum that very often could cause economic difficulties. It is precisely the loans in small and comfortable installments that make the service so appealing and so apparently simple to pay but at the end of the month, when three or four installments have to be paid, the sum is high.
The loan consolidation debts only for loans allows to evaluate the total sum of all the personal loans in progress, calculate a single monthly installment sustainable by the customer and lengthen the amortization plan. In the case of personal loans only, the extension of the installments and the extension of the repayment plan is more feasible than the mortgage which already includes a very long period. Usually this form of small personal loan does not last more than 5 years, so if you extend the repayment plan to 10 years, it is not so serious.
Mortgage consolidation for loans: TABLE
To better understand, also observe the table below which summarizes the main features of the mutual consolidation solution for loans, with a simulation of three loans in progress :
|FINANCING IN PROGRESS||INSTALLMENT AMOUNT||LOAN MORTGAGE CONSOLIDATION AND LOANS|
|PERSONAL LOAN I||100 USD||
|PERSONAL LOAN II||150 USD|
|PERSONAL LOAN III||200|
|TOTAL AMOUNT OF MONTHLY installments||400 USD||200 USD|
Mortgage consolidation loan, mortgage and additional liquidity: CHARACTERISTICS
The loan consolidation solution for debts for loans, mortgages and with the addition of additional liquidity has the same refinancing methods described above with the two forms of consolidation. In addition, there is the request for an additional sum to support additional costs incurred following the signing of the loan, a personal loan or another loan.
However, this type of mutual consolidation moves on to a different calculation and installment of monthly installments. If you request the addition of a liquid sum, the bank that grants this form of loan combines the amount of all the remaining installments and adds the required liquidity; based on the total amount, it recalculates the loan and defines the duration of the repayment plan.
Loan consolidation loan, mortgage and additional liquidity: REFINANCING
The mutual consolidation constitutes a refinancing in which the total sum of the residual debt is completely recalculated based on a longer repayment plan. This means that for the subscription of a new personal loan you must be in order with the payment of the payments. So to speak, one cannot request one of the loan and mortgage consolidation solutions if you have not been regular with the payment of the installments.
With the mutual consolidation it is possible to consolidate, by bringing together in a single installment, all the types of personal loans contracted, starting from the sale of the fifth to small rechargeable loans. However, the fact that, when calculating the residual amount of all loans, personal loans and mortgages, the maximum amount must be sustainable based on one’s own remuneration must be considered. It is not, in fact, said that a very high amount, especially if one is dealing with the consolidation of a mortgage and a personal loan, is accepted by the bank.
Mortgage consolidation loan, mortgage and additional liquidity: BENEFITS
The mutual consolidation operation is economically advantageous if they really have difficulties in paying the installments for reasons regarding the production of income and there is a real need to reduce the total amount of the installments. In all other situations it is preferable to reassess one’s lifestyle and expenses in the family budget, as this form of refinancing could also consist of a significant increase in the interest rate: the result would be the payment of a much higher final capital high compared to the previous contract.
PLEASE NOTE : with the subscription of the consolidation loan it is the banking institution to pay off all debts, or to pay the residual sums to the credit institutions; a new and unique loan is entered into with the same bank: mutual consolidation, with a different interest rate in relation to the purpose of consolidation.
Mortgage consolidation loans, mortgage and additional liquidity: HOW MUCH IS IT GET?
A second possibility for the subscription of a new loan to combine all the installments in a smaller amount, is the possibility of obtaining different amounts of liquidity based on one’s own remuneration, even if always in compliance with the maximum transferable sum. It is recalled, in fact, that in the act of signing the loan, for example, the maximum amount that could be transferred had already been calculated based on the payroll in question. Even with the request for mutual consolidation, this maximum sum must be respected, as it is not sustainable for the user who requests the new loan (consider that he is already in financial difficulty with more loans in progress).
Loan consolidation loan, mortgage and additional liquidity: TABLE
Based on the general lines of the amount of the additional liquidity with the request of the mutual consolidation, it is possible to obtain from 10% to 20% of the sum of the residual credit requested. The amount is added to the residual amount of all current loans and mortgages and is deferred in installments with a higher repayment plan. To better understand and summarize, also observe the following table:
|LOAN CONSOLIDATION LOANS, LOAN, LIQUIDITY||MONTHLY INSTALLMENT||AMOUNT OF LIQUIDITY|
|MONTHLY RATE REDUCTION AND ADDITIONAL SUM||TOTAL AMOUNT OF ALL THE FINANCING IN PROGRESS||10-20% OF THE CONSOLIDATION CAPITAL|