It is likely that on some occasion you have heard about the possibility of unifying all your debts into a single loan. This is what is known under the term debt refinancing or bank refinancing. A financial method offered by PrivaCredit that can have interesting advantages to improve your economic situation. Would you like to know more about this topic? In that case, do not stop reading the following post.
What is debt refinancing
When we talk about a debt refinancing we do it to refer to a new loan through which all the previous debts that we want to eliminate are unified. This method is used for both companies and individuals. At times when economic difficulties do not allow dealing with the pellets and interests that have been acquired over the years.
Through this financial method the new lender is responsible for canceling the previous debts and creating a new loan with conditions that are more affordable to the borrower. In short, it is about acquiring a new or loan in which the conditions of the previous contracts are changed. For example the duration, interest or the repayment system.
Among the different types of loans offered by Particular Credit is debt refinancing. You can learn more about it in the link you will find on these lines.
What are the advantages of debt refinancing
This financing method can be a very interesting alternative for those clients who have accumulated too many debts. In these cases, the most frequent monthly depreciation becomes a problem. Debt refinancing offers the following advantages to these types of clients:
Less interest expense
Through refinancing, only the interest on a new loan is paid. That is to say, that we do not lose capital of each one of our credits with the amortization of dispersed interests. In the refinancing, the interests of the total amount due are recalculated and added together in a single monthly payment. In general, you can move from an annual interest rate of 20% to one of 4%. What is much more relief when making payments.
One payment per month
Undoubtedly one of the advantages of refinancing is that all our debts are unified into one. What does this mean? That we will only have to face one monthly payment every month and not several. In addition this usually has a much lower amount than we were paying for the rest of our debts. Let’s not fool ourselves. This is achieved because the number of years to repay increases and therefore we pay more over time in the form of interest. However, although we may pay more in the long run, we can handle expenses month after month in a comfortable way.
Possibility of accessing other financial products
By means of the refinancing of debts it is possible to be paying month by month what is due in a much more comfortable way. What allows to pay what is owed and gradually improve the financial situation in which we find ourselves. Over time we will have the possibility of accessing other types of financial products that may be useful and interesting.
If you want to know more information about bank refinancing, do not hesitate and contact Particular Credit. We work with the best brokers whose specialty is to negotiate economic conditions with banks.