If there is one thing that usually takes many people’s sleep away, it is debt. In addition to restricting credit possibilities in the market, they unbalance any financial planning. In order to solve this problem, many people turn to debt refinancing.
If you don’t know how this process works, keep reading this post and learn more about it!
Understand what debt refinancing is
Debt refinancing is a type of credit intended for those who have financial issues. It is a great opportunity to end debts and removes the name of the credit protection agencies.
The big advantage is the possibility of negotiating more affordable values for the discharge, even more if the intention is to undo the payment in cash. If that’s your case, don’t hesitate: ask the financial institution for a good discount.
Whoever prefers to negotiate in installments will have their name removed from the debtors’ records as of the first payment.
Know which debts can be refinanced
Virtually any type of debt can be refinanced. You can request this facility for both consumer debts incurred from making a purchase, as well as credit debts, in the case of those who find it difficult to honor with a loan, financing or card bill.
Individuals and companies may also seek to renegotiate tax debts. Anyone who has issues with the Federal Revenue Service or with Social Security can join the program of regularization of tax debts announced by the federal government at the end of 2016. Whoever owes the States or municipalities needs to look for the incentives offered by these agencies to check the possibility of refinancing.
Learn how to apply for refinancing
To make this request is very simple: just contact the creditor institution and check the conditions offered for the debt to be settled. Often, creditors themselves often seek out debtors in search of a renegotiation, or outsource this activity to another company. This is also a great opportunity to make a deal.
In the case of banks and finance companies, some already offer this type of negotiation online, making life easier for those who do not have time to attend an agency in person.
Here are some tips for requesting debt refinancing
Despite being a great way to regularize the financial situation, there are some precautions that must be observed before applying for debt refinancing. The main one is to make sure that you will be able to honor the new commitment, so as not to turn this opportunity into another headache.
If you decide to pay your debt in installments, the recommendation is that the value of the installments does not exceed 30% of your income. This care is essential to reduce the risks of getting involved in other debts because of refinancing.
With the recent declines in interest rates, the current moment is good for those who want to exchange their debt for a cheaper one. To do this, look for financial institutions that have already readjusted their rates to the new indicators to obtain more affordable financing and settle once and for all their financial issues.