Which credits to buy back? How to buy back credits?



The redemption of credits, for whom? Why? Which credits are concerned?

The redemption of credits, for whom? Why? Which credits are concerned?

The redemption of credit is a tempting solution when it becomes difficult to repay debts. It allows to group all its credits in one in the same bank by extending the repayment period but especially by reducing the monthly payment which gives us the feeling of lightening our budget.

Although it has short-term benefits, in the long run, buying back credit is not always an economical solution. Indeed, the longer the repayment period is to reduce the monthly payments, the more we increase the total cost of our credit via the additional interest that we will repay. So must we buy back all the credits? What credits can we buy?

First of all, when we talk about credit redemption, there are several situations open to us. The first is the purchase of real estate loans, which can be grouped together with one or more consumer credits. The second is the repurchase of unsecured credits (ie one or more consumer credits). Finally, the third situation corresponds to the repurchase loan redemption.

The repurchase of credit is a solution open to all, but is often chosen by people at the limit of over-indebtedness, not having filed a file with the Bank of France. However, we will need to justify a serene banking history (no registration at the Banque de France, no banking prohibition) as well as sustainable income at the time of the request for redemption. People on permanent contracts, retired or pre-retirement are therefore eligible for the repurchase of credit. In the case of a fixed-term contract or an interim contract, the files are studied on a case-by-case basis by the banking organizations. Remember: when you buy a credit, do not forget to make sure you can repay it. To accumulate small credits here and there can lead you to difficult situations at the end of the month.

Real estate loans case

Real estate loans case

You own a property and you want to change the conditions of your mortgage or your real estate loans, but also if necessary, that of your consumer credit, several solutions are possible depending on what you want: reduce monthly payments, reduce the repayment term, get better interest rates.

First of all, when we talk about the purchase of one-off real estate loans (without a built-in buy-out with one or more consumer loans), it is important to think first about the interest rates associated with this purchase. Indeed, the interest rates on the mortgage vary over the years, so it is sometimes interesting to resort to the redemption of credit, when the current rates are lower than the rates of your old credit (currently depending on your situation, you can find real estate loans with rates of 1.4%).
It is imperative to keep your objective in mind and to estimate the costs that this purchase will generate. So, when you are looking to reduce the monthly payments of your mortgage, look at the repayment period in which you are located. The redemption will not be the same if you are at the beginning or end of the repayment. So, for your redemption to be interesting, if you are in the first third of repayment, you will have to subscribe to a credit redemption with a new interest rate lower than 1 point (0.01%) whereas if you are in the 2nd third, you will need to look for rates lower than at least 2 points (0.03%). The other case is where you are looking to get rid by ending your mortgage sooner. In this case, you will seek to reduce the duration of your credit. In order for this to be beneficial for you, you will need to make sure that the sum of the monthly payments and the amount of interest you will repay is less than you would have had to repay without the repurchase of the credit.

The second possible case to buy a mortgage is to couple it with one or more consumer credits. Note that you can not group credits such as the PTZ (zero rate loan) or the loan 1% housing. Other consumer loans and real estate loans can be grouped together to be bought back under the same credit.
In both cases, the new banking organization will cover the repayment of all or part of your debts and you will only repay a monthly payment to the latter, over a period ranging from 5 to 30 years. The monthly payment will therefore vary according to the interest rate at which you will have negotiated the new contract, your debt ratio and your income. Remember that when you redeem your mortgage, the bank can ask you for collateral and can do a mortgage on your property. If you do not repay your credit, your property will be seized and auctioned to compensate the financial institution.
Finally, you will note that when the share of real estate loans does not exceed 60% of the total sum due to the different funding organizations (or if applicable to the same organization, if all your credits were subscribed in the same place), the repurchase of credit is considered a buyback of consumer credit. The share of consumer credit must always be greater than 40% of the total amount to be repaid.

Case of the purchase of consumer credit

Case of the purchase of consumer credit

In this case, you do not need to have a real estate loan to request the redemption of your credits, you will just need to have one or more credits for consumption type assigned credits (for the purchase of a property, the financing of a defined project), personal loans (the funds can be used without proof), personal microcredits (when your situation does not allow you to subscribe to a consumer credit), revolving credits (revolving credits) or student loans.

As for the repurchase of a mortgage, you will call on a banking organization which will take care of the redemption of all or a part of the sums which you owe, thanks to the early repayment of your debts. This will allow you to benefit from advantageous rates. In the case of revolving loans, the rates can reach up to 20%. Redeeming your credit by linking it to others will allow you to lower the rate and costs associated with this credit. Beware anyway: the more you extend the duration (the maximum being set at 12 years) and lower monthly payments, the higher the costs are important. It is therefore imperative to perform simulations of real costs (there are a large number of websites that allow you to easily perform simulations, do not hesitate). Do not forget also that you will probably have a bank or brokerage fee (if you decide to use a broker to discount the best offer). In addition, the new organization may impose insurance on you, which will increase fees. Find out about the real gains and costs of this type of transaction.

Relay credit case

Relay credit case

Finally, when you want to move and you already own, it is possible to subscribe to a bridge loan. This loan will allow you to buy the new property while waiting to sell your old property. The time between the two transactions is short: from 6 months to a year. The purchase of your bridge loan allows you to increase the time between the purchase and sale of your property. Be careful though: if you have not sold your property during the term of the contract, the banking organization is obliged to renew this period once. Beyond this extension you may be forced to repay all of your credit to your bank… In this case, the purchase of your bridge loan can be a boon to get you out of a critical situation. If this case is the most common, it is not the only one. Buying a bridge loan can be achieved when you change your mind, for example when you decide not to sell but to rent your home.

Whatever your choice, you can either buy back your loan relay to subscribe to another bridge loan with another bank. This solution is very expensive, you will need to sell your property as soon as possible. Why ? Because when you buy your bridge loan, you will have to pay all of the principal due but also all the interest related to this amount. The other solution is to make a depreciable real estate loan that allows you to rent your property that you can not sell to repay the monthly payments of your credit. It is also important to note that many banking organizations are wary and ask for collateral, as in the case of the redemption of mortgage, the mortgage of your property. top

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