WHAT DO WE UNDERSTAND BY REFINANCING DEBTS?
The refinancing of debts refers to a reorganization of these. That is, based on our financial situation would be to replace one debt with another, but with different conditions.
Therefore, in the debt refinancing loans we can reduce the debt quota, reduce the interest or change it, reduce the term and even join quotas.
When carrying out a refinancing of debts , we find several types of refinancing:
- The first one we find is the SUBROGATION , this consists in changing the Entity to improve the conditions of our loan. In the case of speaking of a subrogation of mortgage we find two options: on the one hand, a subrogation of the debtor , that is, the owner of the mortgage is modified; and on the other hand a creditor subrogation , that is, changing our bank mortgage.
- The second type of refinancing is the NOVATION , this is to change the conditions we have, but with our own Bank, that is, negotiate them with our Entity.
- And the third is the REUNIFICATION , this is to unite all our loans into one. That is, you can pay a single monthly payment instead of several.
On the other hand, companies sometimes also see themselves with water up their necks, in the face of these difficult financial situations, the refinancing of debts for companies can be useful.
When the difficulty of returning a debt stalks a company, you can try to solve it by agreeing to a debt refinancing company with your Financial Entity, a good option that has saved, has saved and will save many companies from going bankrupt and spoiling their business.
However, the refinancing of debts for SMEs may be somewhat more complex than for large companies. Why? For the simple reason that the money that is lent to large companies is greater, therefore, in the case of not facing my debt, it will be the Entity that is affected by this fact. Therefore, agreeing to new conditions and giving the company a new opportunity to meet its payments is something beneficial for the Bank.
Already said one of the most influential economists in the twentieth century, the British John Maynard Keynes :
“If I owe you a pound, I have a problem, but if I owe you a million, the problem is yours.”