The assignment of the fifth is often used with the aim of being able to carry out a debt consolidation without guarantees and without guarantor. However, when it comes to a high exposure to debt, you must first understand where the problem comes from and at the same time admit that there is very little lack of discipline in managing your finances.
What alternatives to the assignment of the fifth?
The disposals of the fifth are not specifically included in the debt consolidation loans. They are very often used for this purpose because they allow to achieve the objective of consolidating, or merging, various loans, so as to have to face only one installment to be repaid. All without apparently having to give other guarantees or present a guarantor. But is this really so?
Quite the opposite, the transfer of the fifth simply concentrates the guarantees on the reimbursement method which excludes the financed, through the formula of the retention upstream of the fifth of the salary that the employer then pays to the bank or the financial company. It is therefore a type of financing that can be used as an alternative to consolidation (where instead a guarantor or the presentation of other guarantees may be required), but great discipline is required in reorganizing one’s finances.
In fact, unlike a real debt consolidation loan, there will be no direct repayment of the loans already underway by the bank that grants the new loan. It will be the funded that will have to provide for extinguishing each individual loan. This aspect brings to light another problem: in calculating the sums to be allocated to each loan, the extinction penalties should also be considered, proceeding precisely to the request of the extinction counts.
So the risk that you will find yourself with an additional debt, and other loans still in progress, so that you cannot repay all the installments in a timely manner or without a real suffering of your spending power, is very high. Using the assignments of the fifth to achieve this type of result, for which among other things specific financing has been devised, is very often a bad choice. All the more so when you go this way with the aim of obtaining even more liquidity. Unfortunately, curbing debt can be very complicated, and in some cases we get to situations that are on the verge of sustainability, or even beyond.
The real “consolidations”
A mortgage or debt consolidation loan is nothing more than a loan that has a specific purpose: to obtain the liquidity necessary to repay existing loans. Normally the request is made for total extinction but in some cases it can also be used for partial extinction. Especially in the latter case, greater difficulties may be encountered, as the element of reorganization of payments, which simplifies the repayment procedures, is lacking. This is also the hypothesis in which the bank asked to grant the loan will be less willing to grant a debt consolidation without guarantor and without guarantees.
In an absolute sense, the basis of the operation of this type of loan must be adhered to, renouncing the request for additional liquidity, in order not to risk making the procedure more complicated.
How to avoid having to provide guarantees and ancillary guarantees?
If a practice is not particularly complex, or unclear, or simply if it does not indicate a further increase in the applicant’s debt exposure, against an income assessed and deemed sufficient, there should be no nasty surprises. So the first thing to do is to get some estimates, which can also be used to evaluate the more or less simplified “feasibility” of the procedure. How to do?
An assessment must be made of the amount of the installment which will be reimbursed overall. If this concentrates the sum of the installments already in progress, reporting a slightly lower amount, then the difficulties will be few (unless there are other problems, such as reports in the Sic or similar databases). Among other things, the difficulties of obtaining the sum that is needed, without inserting guarantees or guarantees, decreases as the amount of the calculated installment decreases.
In addition to not requiring additional liquidity, repayment plans should not be extended beyond an acceptable threshold. In general, the longer the duration of a loan, the greater the chances that the funded person may be in difficulty and not repay all the amount due. Also in this case, as a direct consequence, there will be a tendency of the credit institution to increase the strength of the guarantees, in most cases preferring personal ones (with the insertion of other income especially through the guarantors) but if necessary also real type (as with the use of real estate, pledge on securities, etc.).
If in addition to having to reorganize payments there is also the forced need to request new liquidity, then the possibility of considering the transfer of the fifth returns perhaps accompanied also by a loan with delegation. In this way you will also have the guarantee that the maximum debt exposure will be 20% or 40%.
What to do and how best to choose?
Debt consolidation financing requires documentation that does not belong to other forms of loan. This aspect must not prevent the request for quotes, which should never be confused with the “feasibility” procedures. In this phase, which is always part of the evaluation and choice phase, it is still necessary to obtain real and official estimates, also to see if the maximum amount we need is available (and payable) at the chosen company.
In addition, even if they are not directly comparable products (because they are born with different objectives and also work in a different way), it can be useful to combine the search for real debt consolidation loans with those for the transfer of the fifth. This preventive research allows you to tack a course with greater ease and proceed, in case of problems, with an alternative type of financing that is closer to your possibilities or to what you really want.