Debt renegotiation a modality widely used by financial institutions, especially in times of crisis. And is it a procedure that can be very useful for those who are indebted. The idea offer a product, with lower interest, so that the client can settle any debts with the institution. Speaking like that, it seems simple and tempting, but I need to be careful. There are no miracles in the financial market, and somehow you Continue in debt with the institution. The important ensure that this debt is in line with your budget, otherwise the problem may even get worse. See 5 mistakes you made. you cannot commit when renegotiating your debts:
1. Adopt longer terms
An “unknown trap in loans is their deadlines. Most people think that s the interest rate increases the final cost of a loan. But, in fact, long terms are also burdensome on loans. This is because the incidence of interest stretches over time and makes the final cost higher than expected.So, if you negotiate, do not extend the payment term beyond you had originally hired.If so, will you can pay less per month, but will spend more at the end of the operation.
2. Fall into the trap of tied sales
Not all institutions act appropriately in renegotiations. An example those that practice the tying sale, taking advantage of the despair of the customer who is indebted. Thus, managers consider hiring another product like insurance or capitalization bond, as a condition for renegotiating. In addition to being detrimental to your financial health, it is tying crime. If you are a victim, report the institution immediately
3. Getting back into debt
After renegotiating, will you you should review your budget. After all, if you were in a debt situation, it means that his finances were not healthy. If you’re not careful, you will. you can go through the same situation again in a short time.
4. Choosing the wrong life to renegotiate
If you are in debt in different situations, the best choose the biggest ones to renegotiate. In general, the most expensive debts are those related to the credit card and action overdraft. If you owe a lot on these products, prioritize renegotiating those debts over others. See the comparison between the most expensive credit lines, such as card and overdraft, and Just, the personal loan platform of Good Lenders. Interest rates Create your own infographics
5. Don’t check the total cost of debt renegotiation
Are we not the interest rates that are included in a renegotiation transaction. The financial institution charges several charges for its products. All of this must be registered in the contract on a consolidated basis. To know how much it is paying for the operation, consult the CET (Total Effective Cost). Are you he may be paying for the renegotiation more than he was discriminated against in his previous debt. No Just, the rate disclosed always the CET and you never surprises. Stay tuned at the time of debt renegotiation and don’t fall into the traps mentioned above! To learn more about this subject and others, follow our profile on social networks!