When deciding to debt consolidation should consider several factors.
Pay less each month, but more long-term interests are paid:
Based on extending the life of the loans, will end up paying more interest with which the debt becomes larger. It is the counterpart to change short-term commitments for longer-term debt.
This is a very expensive operation:
Before undertaking a debt consolidation the customer must assess that he is faced with a costly financial transaction that involves a number of expenses.
The financial institutions reluctant to debt consolidation at present:
As the crisis has progressed, the processes of debt consolidation have plummeted and almost no financial institution is shown in principle in favor of this operation. However, go to the bank and negotiate with debt consolidation is always the first option to value, provided that the financial market is well known. Otherwise, it is best to consult a financial intermediary.
If going to a financial intermediary is advisable to consult either the type of fees charged hovering between 3-5% of the amount of the transaction. In addition, the financial intermediary should only charge you commission if the client is interested in the mortgage that you find and operation was eventually formalized. The customer should know that he hires the loan with the lender and not with the brokerage firm.
If you go to private capital, can count on professional advice:
If it does not achieve that a financial entity reunifies the debts, in the market there are private equity firms that engage in it. If you go to private capital for the debt consolidation are advised to have counseling with a lawyer or a financial professional. It should also be borne in mind that the interest rates applied by private equity firms are often very high.
In addition to considering these factors, if you decide to debt consolidation, must be absolutely sure that you can cope without problems to the new mortgage payment, because in case of default, the foreclosure process is usually immediate.