With the exceptionally low rates currently practiced, it is particularly interesting to proceed with a loan buy-back to reduce the amount of your monthly payments. The repurchase or grouping of credits thus makes it possible to have savings to meet other expenses or to finance other projects. Here are the advantages of buying back credit as well as the different conditions to be fulfilled to make the transaction successful.
Consolidate all existing credits
For the credit consolidation procedure to pay off, it is necessary to combine all the loans in progress: real estate credit and consumer credit (personal credit and revolving credit). The repurchase / consolidation / restructuring of credit consists in having its current credits repurchased by a bank against the subscription of a new credit with this one. Clearly, the bank of your choice will reimburse your existing credits and in return, you agree to sign a new loan contract offered by the latter. This can help to significantly reduce spending at the low level of current rates. However, if it makes it possible to gain purchasing power, it can also increase the total cost of repaying credits as well as the duration of payment. But the other strong point of the repurchase of credit is that if the real estate loan represents more than 60% of the debts to be reimbursed, the new credit subscribed will be accompanied by the same conditions as the home loan: rate, duration,… As a result, the spending on cars, renovations, personal projects, etc. can be reimbursed over 15 years.
Make a credit buyout by excluding a zero rate loan
The loan repurchase (including the repurchase of credit without proof) cannot be associated with the loan at zero rate (PTZ) if this one is not transferable. Indeed, the credit company will not transfer the gift it received from the government to another creditor. In addition, if the financial institution has granted only one mortgage combining the mortgage and the PTZ, the debtor who wishes to offer his credits for redemption will have to settle the two credits before taking the new loan. On the other hand, if the PTZ is not the subject of any mortgage, the mortgage can be bought back separately. Good to know: the PTZ can be excluded from the repurchase of credit but it is always taken into account in the calculation of the debt ratio of the borrower. Thus,
Save money by buying back credit
Credit consolidation also offers the opportunity to request a cash reserve which can reach 15% of the total amount of credit pooled. These savings can be used to pay for new purchases, to cope with an unexpected event, to get through a bad financial spell. This money is made available to the applicant upon the conclusion of the credit repurchase contract. Its amount is capped at $ 60,000. And it can be used freely, without providing proof of purchase (invoice, payment receipt, etc.) to the bank. However, if the money requested is allocated to a particular project, it will be possible to obtain a larger sum. But, you will have to give proof of purchase to the lender. And in all cases, the amount obtained must not exceed the total amount of the credit repurchase.