Refinancing of Debts – Consolidating Loans

The refinancing of debts without mortgage is a financial solution that allows us to cancel debts from personal loans as well as fees derived from the use of credit cards. an elucidation on

Sometimes this type of debt becomes a heavy burden and if we can not pay it within the period requested, instead of paying the agreed monthly payment , we can reduce the amount of the monthly letter with the reunification of debts , which allows us to group all the debts in a single installment.

In which we can even get to pay only interest due to the lack of payment of the capital thanks to offering a real guarantee as a commercial space or a home.


The problem is that the value of the real estate guarantee could limit the amount to refinance

debt refinance

Although it is easy to get an average of 30,000 euros refinanced , so we can group a large part of all personal debts in the short term and therefore those that more difficult to get to the end of the month. Although all this depends on the bank and the company that requests the refinancing of the debt .

In order to carry out a successful refinancing it is essential to do it before incurring unpaid installments, and above all before the debt becomes delinquent.

First because we will have less time to sign the refinancing, and second because the operation will generate higher expenses and possible complications when requesting a new future loan to replace the previous ones.

So a good financial planning will avoid messing up our credit history of individual or company with the bank. Not all entities are open to refinancing without a mortgage, although CCdC is usually open to the reunification of SME loans .


This type of transaction will involve the payment of higher interest rates

This type of transaction will involve the payment of higher interest rates

given the type of operation, an increase in the interest rate is normal , but it will undoubtedly be lower than the average for other short-term loans. And although the interest rate does not imply a reduction in the refinancing, it will be the increase in the term. That will allow an improvement in the treasury of the companies that they like to receive a refinancing operation .

When it comes to starting a debt refinancing operation, it is essential to be transparent with all creditors. No matter what the amount of your debts, anyone can be important so that your SME can reduce the payment of the monthly installment of the debt.

And above all it is essential that everyone understands the refinancing strategy, as a way for the debt to be affordable and thus ensure the financial viability of the company . In the case of a refinancing without a CCdC mortgage, this will facilitate the process with other creditors, since not requesting guarantees is a good sign of the solvency of the debtor company .


In this type of financial solutions

financial solutions

It is essential to put yourself in the hands of professionals, especially to perform coordination functions and thus avoid that the refinancing process stagnates due to lack of agreement with one of the creditors . Hence, giving information and ensuring the confidentiality of all creditors is essential to ensure the successful completion of the refinancing operation .

In procedures to ensure the financial viability of an SME, it is essential to negotiate with all creditors and to accept the conditions of the refinancing process, a credible viability plan must be presented. This translates into documentation that includes the following key points:

  • Viability plan with a detail of how the activity of the company will be restructured, especially with regard to personnel expenses and total liabilities. In addition to including which are the agreements closed at the level of company refinancing and the assets that will respond to the new debt resulting from the refinancing process.
  • Breakdown of outstanding loans, in terms of their origin, amount and maturity.
  • Long-term financial plan of the company, which indicates the future financing needs that will be satisfied with the activity of operating the business, in order to demonstrate the long-term viability of the business.


What are the advantages of reunifying the payment of debts?

The advantages of the debt refinancing process for companies are several:

  • Improve the financial viability of the business by increasing the term of payment of debts, which automatically reduces the amount of the monthly payment of the installments of loans and credits.
  • Improve the treasury position by reducing the payment of the monthly fee, and thus have money to assume other payments even if they are unforeseen despite scenarios of falling revenues.
  • The debtor can be calmer after the process of refinancing to be able to guarantee the payment of the resulting monthly fee, and thus avoid defaults that could greatly complicate your financial situation. What will improve your credit history to be clean of any unpaid action or record in files of defaulters as asnef or RAI. Avoiding losses due to the sale of assets in judicial executions due to unpaid debts, as well as expenses derived from legal claims.

After the reform of the Royal Decree Law on Urgent Measures in Refinancing and Restructuring of Corporate Debt, the situation has improved. Since this regulation aims to prevent companies with permanent financial problems from entering into bankruptcy.


A procedure where it is very difficult to leave and therefore the company ends up disappearing

This way, solvent companies will be able to resort to this regulation to be able to save difficult financial situations , as they can have greater facilities to negotiate with their creditors to take away or refinance the debts of the company .

For this they can make individual refinancing agreements with each creditor , without being necessary to do it jointly as in the bankruptcy proceedings, which is more difficult to achieve.

These agreements are permitted by the royal decree law as long as they do not harm the viability of the company or involve high interest payments. In the case of banks and private funds, if the majority has signed a fair agreement for all the creditors then all must accept the agreement. What facilitates the scope of agreements within the refinancing process.

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