October 25, 2020

Reunifying the debt can reach a cost overrun of 746% for the client


MADRID

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Debt reunification can generate customer an increase in the amount to be paid of 746%, up to eight times the initial price, according to a study by the Association of Financial Users (Asufin) made public this Monday. In short, it is a kind of solution offered by credit companies to join all pending payments into a single one, with a new repayment term and reduced interest that generate a lower monthly payment.

In this way, all loans are paid in exchange for generating a new one, through a new loan or mortgage, which extends the previous repayment term and interest rates. Asufin assures that the reduction offered by the main firms in the sector in this quota can reach 80%.

The study has compared the proposals of the seven main companies that offer to reunify the debt, concluding that The reduction in the monthly payment is accompanied by an increase in debt and in terms due date.

The average reduction obtained is 511 euros, which is around 77% (in the case of Deudafix, 80%). In return, the initial debt from which it was started, prior to reunification, of about 137,000 euros, becomes more than about 161,500 euros, in the best case and 252,700, in the worst scenario. That is to say, represents an increase in debt that ranges from 18% (24,500 euros) to 84% (+115,700 euros).

Regarding the term, the base loans did not exceed their maturity in 10 years (including a mortgage that would end in sevenyears and a half). Once reunification is complete, it would contract a new debt in the form of a mortgage of between 30 and 40 years of repayment term.

The association has also asked customers who have reduced their monthly payment if they were aware that this situation has caused an increase in debt. 45% of those surveyed say they have not noticed this extra cost.

Consequently, Asufin has warned that extreme precautions must be taken with regard to this type of product, since the initial effect of reducing debt costs is a mirage if one does not take into account that the interest rate end and the increase in term makes it much more expensive.

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