Credit repurchase: when is it interesting?
Buying back credits allows you to reduce your monthly payments, when is the best time to use this operation? Here are our responses.
Credit repurchase: when? Or? How? ‘Or’ What?
The principle of grouping credits is to group all the loans of a household into one, the new term is extended and the monthly payment is reduced. It is possible to set up this operation through your bank or a banking intermediary. For the establishment, it is recommended to turn to this funding when the household can no longer repay their monthly payments or will have to face a change in situation (professional retraining, birth, divorce, separation, etc.).
Here are the situations where the repurchase of credits is interesting:
When the borrower has several revolving loans, formerly called revolving (with rates close to 20% …)
- When the borrower has a debt ratio higher than 30%, the slightest change can turn the financial situation upside down
- When the borrower wishes to simplify the management of his loans
- When the borrower wishes to carry out a project and his credit requests are refused (possibility of adding an amount for a new project when buying back loans)
- When the borrower wishes to anticipate the drop in income linked to retirement
This list is not exhaustive.
Uninteresting special cases
Credit line and mortgage
Sometimes grouping loans for certain borrowers is not the best solution. This is particularly the case when the mortgage arrives at its repayment term, the loan repayment rates are never as low as the mortgage, no need to redeem this loan. However, the other loans can be redeemed.
Another scenario, if the borrower has only a mortgage and no consumer credit, we speak rather of renegotiation of credit.
Loans with a definite advantage
The zero-rate loan, the employer loan and other advantageous credits are very rarely included in a loan consolidation since they have advantages that this type of operation will not allow to obtain. If these advantageous credits represent the major part of the credits of a household, it will be useless to make lose this advantage by setting up a repurchase of credits.
Simulate its financing
The best solution to find out if a loan buy-back is interesting is to carry out an online simulation. It’s completely free and without obligation. The operation is simple, you fill in the form then after validation, you receive the estimate of your future reduced monthly payment. This allows you to compare with the total of the current monthly payments and to carry out the interest of a loan repurchase on your finances.