If you have taken a consumer credit and for some reason you need to know how to refinance the credit , here we offer you the answer to that doubt and how to do it. We generally refinance a loan to reduce the monthly installments we pay, but at the cost of increasing the repayment period of this.
What is a consumer credit and what are they for?
Consumer loans are a financial aid that allows to reorganize debts , as well as to be able to finance short-term projects and solve different economic needs in the short term.
Can I renegotiate or repair my debt?
There are certain periods in which debts can be renegotiated or repaired , it is best to decide to renegotiate debts, and thus access better conditions. There are differences between renegotiating or repairing:
- Repairing: If they decide to repay the debt they would only be extending the number of installments and would pay a higher interest.
- Renegotiate: If they decide to renegotiate the debt they can improve the credit conditions, lowering the interest rate , the installments and the payment term.
Why refinance the consumer credit?
When refinancing a consumer credit , they may suffer a bad financial situation, not having liquidity for the overindebtedness or due to better conditions in another bank. Those and others may be the reasons for refinancing.
Refinance the consumer credit
They can improve the conditions of a consumer credit without prepaying it completely, although it may be the best option, at the same time it may not be the most economical. For the refinancing of the credit , they must calculate the debt again, seek to reduce the quota since they were reduced interest rate, the associated costs of credit, and reduce the amount to be paid, so they will also lower the amount of fees. Luckily there are banks that seek to capture customers from those who have debts, which allows some to refinance their debts.
How to refinance a consumer credit?
They must follow the following steps to refinance the consumer credit :
- Quote the refinancing of consumer credit in different banks
- Renegotiate the refinancing conditions in other banks, and request a longer payment term, reduce fees and interest and the total cost of debt.
- Although it sounds difficult and contradictory since they have debts, they should be able to show banks that they are solvent and orderly in their finances.
- Send the situation statement showing that they have sufficient liquidity in the different months.
- If they manage to obtain liquidity in some way and show that they managed to reduce other debts, banks may agree to reduce their debt and then lend them money.
To achieve debt refinancing, it is best to demonstrate your expenses, and the monthly liquidity they have. Banks are not going to trust to give them the word or to promise them, they have to see tangible data and responsible behaviors with their debts to trust and lend them money and refine their debts.