Refinancing can help you obtain liquidity if you are looking to fulfill a purpose or unforeseen event, and you do not want to affect the state of your debts.
To access refinancing or recast, first, check how your monthly expenses and your financial statements are.
Consider that you must meet some requirements, such as not having any late payments since you contracted the credit, and also, it must have a certain age.
Below you can find some of the advantages and disadvantages of refinancing to consider if you are looking for this option.
WHAT’S IN ITS FAVOR
There are different types of refinancing, and many of the conditions depend on the financial institutions with which you have obtained your credit:
- In a specific type of refinancing, you will be able to access an amount in cash so that you can use it for any of your purposes.
- If you unify two or more credits, you will have a much more manageable reading in your account statements.
- Ensure that the refinancing terms do not change compared to your current credit so that your monthly payment is not affected.
- If the interest rate is variable, it would be better to change it for a fixed one since this type of rate gives you greater security for the duration of the credit.
- If the monthly payment remains the same during the life of the credit, you will better plan your family expenses.
WHAT ARE ITS DISADVANTAGES
Just as you can achieve better conditions with the credits, you also have things against you:
- Consider that if, as part of the refinancing, you seek to reduce the term, the monthly payments will increase, which may affect your already established expenses.
- Refinancing may generate costs or commissions. You should review it first with your financial institution.
- If the refinance is on your mortgage credit, you could increase your mortgage payment much longer, and you may not pay it off before you retire.
- This last point would also prevent the value of your house from increasing because it is still mortgaged.
Finally, remember not to lose sight of the new credit’s interest rate, term, and commissions, to know if it is convenient or not for you to access the refinancing.
You can do it directly with the entity’s collector or through the Superintendence of Insolvency and Re-engagement ( SUPERIOR ), which acts as a facilitator of agreements between the debtor and his creditors. We suggest you read this instructable if you are in this situation.
Knowing the differences will make it easier for you to choose an option in case you find yourself in a situation. To avoid having to renegotiate it is important that before requesting a consumer credit you do all the necessary accounts and that you choose the most appropriate option for you, making sure you can pay the monthly installations.
