Repurchase of credits -In the dead end?
Opt for a repurchase of your credits
Like many active people, have you taken out several loans over the years? At the beginning, there was the famous student loan which allowed you to finance your studies, and to repay, only, when you return to professional life. Auto credit followed so that you can buy yourself a decent car to get to the office. Then came the decisive day when you found the home of your dreams. The mortgage then facilitated its acquisition. Then, other personal loans have accompanied you in carrying out the work on your home, or in financing a trip.
The credits always bring a pleasant support in the realization and the development of our adult life. When we contract them, we often only see this large amount of money available immediately to satisfy our need at the moment. Less concerned about their repayment, we believe we are up to the monthly payments that will be withdrawn each month. Only here, if the amount of each withdrawal does not seem so important, put end to end, the monthly payments of all your credits can represent a hell of a hole in your budget and lead you little by little to overindebtedness.
Are you starting to get mixed up in the different monthly loan repayments today? Are you running out of steam on an increasingly tight budget? Do you feel that you will soon lose your footing? It may have come time to think about buying back your credits!
1. What is a credit redemption?
As its name suggests, the repurchase of credit consists in repurchasing by a financial institution, all the credits and debts of a person in order to regroup them in one and only credit. This new credit will obviously have to be repaid by this person in the form of monthly payments. This financial solution, often offered to active people in a situation of excessive debt, aims to reduce the overall amount of monthly repayments. The repurchase of credit then makes it possible to simplify the management of repayments (only one monthly payment each month) and to reduce the amount. A lower monthly repayment installment will then allow the indebted person to find a little more financial ease. However, the monthly withdrawal payments being lower lead to an increase in the duration of the credit. The repurchase of credit is also called consolidation of credit, restructuring of credits or consolidation of credits.
Four types of credit redemption are distinguished:
- The so-called tenant repurchase grouping together several consumer loans
- Real estate repurchase including mortgage and consumer loans
- The repurchase of professional loans
- The repurchase of credit by repurchase purchase / sale.
2. Who can claim a loan repurchase?
The repurchase of credit is intended for any natural person, having contracted several credits, and presenting financial difficulties. However, like credits, the repurchase of credit commits you to repay this single credit. For this, the organization carrying out the repurchase of your credits will look at first, if you are solvent. In this case, it is easy to understand that the most appreciated people are the employees on permanent contracts;
However, if you are on a CDD or temporary contract, it is also possible to make a request to organizations specializing in credit redemption, which have developed offers adapted to your professional situation. In this specific case, the conditions for obtaining it are certainly more demanding than traditional consolidations, but still remain interesting. To obtain a repurchase of credit, the organization will then calculate your solvency only on your wages in CDD. Social assistance will not be taken into account in the calculation. In addition, a third party on CDI (family or close) will be asked to vouch for your loan repurchase.
In the event that you are unemployed, granting a repurchase of credit can quickly become an obstacle course. Here the problem for the lenders is precisely your lack of solvency. Without a stable financial situation, specialized banks fear the non-repayment of monthly payments. However, in this situation, there are still several solutions to repay your credits. First, it is important to be familiar with the law on the subject in your country. For example in United States, a law provides for the possibility of suspending the repayments of your credits for two years. To benefit from legal aid, you must contact the court closest to your home. There, a form to fill out will be given to you and the name of your lawyer will be communicated to you. Second solution, if all the banks have indicated their refusal to grant you a repurchase of your credits, you have the possibility of using a broker specializing in repurchase of credit. He can often be more convincing and have arguments to better defend your case. Finally, in the case of a precarious situation, it is always good to propose a person who will vouch for the redemption of your credits. Provided, of course, that this guarantor can justify a permanent job.
For civil servants, there is a special offer intended for them: the repurchase of civil servant credit or said civil service. This loan buyback is intended, in particular, for civil servants, magistrates, soldiers, agents of local communities or agents of urban communities, auxiliaries of the State or of an establishment dependent on the State.
3. Which organizations offer credit redemption?
It is possible to make a request either to banks or to organizations specializing in credit redemption. However, we must remain vigilant vis-à-vis specialized organizations. You must ensure that these are approved by the Prudential Control and Resolution Authority.
Regarding banks, you should know that at the legal level, your bank cannot buy back its own mortgage. So if you want to include your mortgage in the repurchase of your credits, your bank will be unable to provide you with this service. Going through another bank may be possible. However, the latter will probably ask you to open a current account with her in order to deposit your income.
For more information on organizations and banks carrying out loan redemptions, lists as well as rankings are available on the internet. At the French level, for example, the certified and qualified organizations in the field are as follows:
- CETELEM, a subsidiary of the BNP Paribas group, which has become the European leader in consumer credit
- SOFINCO, subsidiary of Crédit Agricole
- CMP Banque, the Banque du Crédit Municipal de Paris
- CREATIS by Cofidis
- COFINOGA of the European group LaSer
- Mediatis, specializing in online credit redemption
- LCL, a subsidiary of the Crédit Agricole group
- CGI, a subsidiary of Société Générale
- The postal bank
- CFCAL, a subsidiary of Crédit Mutuel Arkea
4. The advantages of credit redemption
The main advantage of redeeming your credits is obviously to have only one credit to manage. In addition, with the repurchase of credit, you adapt the amount of the monthly payments, to your repayment capacity. The repurchase of credit thus makes it possible to simplify the management of your budget, to have a single interlocutor and to reduce the amount of the monthly payments. Simpler, you already know the amount of the monthly payment that will be withdrawn on a fixed date, each month. Regarding the decrease in monthly payments, the latter can be reduced by up to sixty percent. Lower monthly repayment installments allow the person benefiting from the repurchase of credit, to find a better purchasing power. Finally, the third advantage and not the least, concerns the interest rate of the repurchase of credit. Indeed, its interest rate is lower than those charged by the famous consumer credits or so-called revolving credits. The legal rates for loan redemptions are between 5% and 8.5%. They are obviously much lower than the 21% of consumer loans.
By mentioning revolving credits, the great advantage of credit redemption is to put an end to the infernal spiral of these very famous so-called revolving credits.
5. The limits of credit redemption
The repurchase of credit will bring you a little oxygen in the management of your budget and on your purchasing power. However, do not be too idealistic since even if the repurchase of credit reduces the amount of monthly payments, it does not exempt you from the total repayment of the amounts due. In this, it is important, even imperative to become aware of the limits of the repurchase of credit and to know the disadvantages that it involves.
First of all, its first and unavoidable drawback follows directly from its main advantage. And yes, far from being a miracle recipe for over-indebtedness, by reducing the monthly repayments, the repurchase of credit extends the duration. You will therefore have to endure this repayment situation even longer. In the end, and therefore the second disadvantage, this longer duration of the credit leads to an increase in its cost. You breathe more each month, but in the end you will spend more money.
Then, the repurchase of credit inevitably leads to additional costs such as administrative costs or the subscription to new insurance. But the most important costs concern the prepayment costs of your mortgage. Indeed, when your mortgage is redeemed by a new financial institution, your old bank will then charge you penalties for early repayment of your mortgage. Note that these penalties are capped at 6 months of interest on the outstanding capital. In addition, if, however, your mortgage was contracted with a mortgage, playing the role of financial guarantor, mortgage taking and release fees will also be deducted.
Finally, when you decide to embark on a repurchase of your credits, it will often be very difficult for you to make the most advantageous choice for your situation. There are indeed many credit buyback offers: those from banks, advertisements on television or on the internet from specialized organizations. It is not always easy to know on which criteria to evaluate all these offers. It is therefore wise to call on an expert in the field such as credit redemption brokers. However, even if the broker manages to land you the best deal, their service is not free. The broker will take a commission calculated as a percentage of the loan amount (approximately 1% of the loan amount). In the immediate future, you will therefore be satisfied with its service, especially since you will not have to pay it directly. The lending institution will take care of settling it. On the other hand, the cost of its service will be passed on subsequently to the amount of your monthly payments.
Finally, very often during a repurchase of credit, the specialized financial establishment will offer you to supplement your repurchase with a sum of money immediately available. Even if it is tempting, this new sum represents above all an additional credit which is added to the amount to be repaid. In the case of financial difficulties, it is often more judicious to play in moderation.
6. What are the credits that can be redeemed
When buying a loan, it is important to know all the types of loans that can be redeemed. This will allow you, later, to know exactly what form of buyback you need and to choose the most advantageous.
Consumer loans can be the subject of a credit repurchase. If the repurchase of credit concerns only consumer credits, we then speak of repurchase tenant. If the repurchase of consumer loans is accompanied by a repurchase of mortgage, it is in this specific case a repurchase of mortgage.
Consumer loans, also called personal loans, include the following loans:
- Loans allocated to a specific expense: student loans, car loans, for the most famous are concerned.
- Loans not linked to an expense: loans where the sum of money can be spent without proof
- Online credits
- Permanent credits or called revolving: credit representing a sum of money made available to the borrower on a permanent basis. This reserve of money is automatically reconstituted with the monthly repayment installments. Their repurchase finally makes it possible to close this type of credit which pushes many people into debt.
The mortgage is a loan allocated exclusively to the acquisition of real estate. The mortgage allows you to either buy or build a property, or to repair an existing property. This type of credit is highly regulated by law. It is however open to credit redemption under certain conditions. First of all, the mortgage lender cannot buy back its own mortgage. You will therefore have to go through another organization for the redemption. In addition, the early repayment of the mortgage leads to penalties that will be billed to you by your old bank.
Often ignored, your various personal debts can be grouped together with your other credits in the repurchase of credit . This option allows you to list all of your various debts, to avoid late penalties and therefore to improve your financial situation. Among the personal debts taken into account in the repurchase of credit, we have the following debts:
- Tax delays: you must then provide a certificate of situation, issued by the tax service, mentioning the amount of your debt.
- Late rents: here too, a certificate from your lessor will be requested
- The sums due to the bailiffs with the statement of your situation
- Family debts or to private lenders: in this specific case, a certificate from your creditor must be made and registered with a notary in order to justify the existence of the debt. You will also be asked for your account statement from the month you received this amount of money.
- Payday advances or loans granted by your boss, accompanied by a certificate notifying your situation.
- Unpaid bills such as electricity, water or telephone bills
On the internet, you will find online simulators, allowing you to take stock of all your debts and their amount in order to calculate your future monthly payments and the cost of your credit redemption .
7. The different ways to redeem your credits
Once you have completed the inventory of all your debts (loans and personal debts), there are different ways of proceeding with the redemptions of your loans.
These different forms of credit redemption depend on three main criteria, namely: the amount you will need for the redemption, the types of loans contracted and of course the time that you can devote to finding an organization specializing in the redemption.
First of all, if you are short on time, the easiest way to redeem your credits is of course to go through an online platform. Applying online has several advantages. First, no need to move and run from one organism to another. From home, calmly, you first perform a simulation of your credit redemption in order to know the amount of your future monthly payments and to see if your financial capacities allow it. Then, this simulation helps you to inventory your various credits and debts with their associated amounts, as well as the goods that you own. Finally, this platform will allow you to compare the different offers available on the market. Once your information has been entered and the simulation done, if you confirm your credit redemption request, your file will be sent directly to the specialized organization. A response from them will also be given very shortly. The only downside to choosing the online application is that you are on your own, without input from a specialist advisor in the field, to make sure you make the right choice.
Then if you still lack time for your research but you want the support of an expert in the repurchase of credit, you can call upon a broker in repurchase of credit. Its role will consist first of all in analyzing your file then submitting it to various specialized organizations and finally, seeing the offer best suited to your situation and helping you in your choice. The follow-up of your file by a broker can be decisive in obtaining a repurchase of credit since as an expert, he will know how to value your situation so that the specialized organization grants you the repurchase. But beware, any service has a price! At some point, you will have to pay the broker's service. Most often, the broker is paid directly by the lender. The latter will pass these costs on to you in the amount of your monthly payments.
If your redemption mainly concerns your mortgage, you can always opt for a renegotiation of the said credit with your bank. In fact, since 2015, the interest rate on mortgage loans has been falling. From 3.20% before 2015, they are now around 1.81%. With such figures, it can be profitable to renegotiate your mortgage with your banker. This renegotiation can then allow the reduction of the amount of the monthly payments on the remaining time of repayment or to be able to shorten the duration of the loan if you keep the same monthly payments. But beware, a renegotiation also generates new costs, such as administrative fees of between 500 and 800 US dollars, on average. The advantage of renegotiating your mortgage rather than repurchasing it, is that with renegotiation you don't have to pay prepayment penalties since you will be dealing with the same banker.
Whether you opt for online application, the services of a credit broker or renegotiation, it is always important to have properly analyzed your situation and the various offers on the market.
8. How to prepare your file
In order to put all the chances on your side, for the rapid obtaining of a repurchase of your credits by a specialized establishment, you must, first of all, gather a certain number of parts.
First of all you need to be able to justify your identity. A photocopy of both sides of your valid identity document (identity card or passport) is therefore necessary. But some organizations may also ask you for additional documents such as: a photocopy of the family record book, a photocopy of the marriage or divorce certificate (depending on your family situation).
Then, you will have to prove your place of residence. To do this, you must have an electricity or gas bill, dating back less than three months. A landline phone bill or rent receipt can also be used to justify your domicile.
So far, nothing very complicated. On the other hand, you will have to be meticulous and precise on the following two points, namely: your income and the state of your credits and debts. In fact, the lender will want to ensure your repayment capacity. For this, he must be able to assess your percentage of debt.
Regarding your income, the credit redemption establishment will ask you to provide your last payslip as well as that of December of last year, as well as a copy of your employment contract with the date of your entry into the company. . For self-employed persons, they must provide their last two tax notices. If you are retired, then you will provide the latest pension fund statements.
In terms of the state of your credits and your debts, you must collect the various contracts of your credits to be redeemed, your last three months of statements of all your bank accounts, as well as letters of confirmation of the balance of loans to be paid off. and / or the amortization schedule for each loan. For revolving credits, your last account statement linked to this credit will also be requested.
Regarding your personal debts, do not forget to provide all certificates or proof of their existence: unpaid invoices, letter justifying late payment, acknowledgment of debts before a notary….
If you are the owner of real estate, it is always good to provide a copy of each deed of purchase of this property, registered with a notary.
A well-completed file will be processed quickly by the lender. In addition, this file must reflect your situation but also all your seriousness. This, in order to put the financial structure in confidence.
9. The profitability of credit redemption
As we have seen above, a repurchase of credit can make it possible to reduce its debt ratio and to find a decent purchasing power. However, before embarking body and soul in obtaining the redemption of your credits, you must calculate if this new operation will be really profitable for you. Indeed, each situation remains unique and obviously depends on your debt ratio before redemption, your income and the types of loans you want to redeem.
Redeeming your credits therefore supposes repaying these said credits in advance and opening a new, unique credit, encompassing all your old credits as well as your personal debts. This financial transaction is not without causing new costs both at the level of the establishments managing your old loans and the new organization taking charge of their redemption.
First, when you are going to close your old loans by repurchasing them, the establishments holding these loans will make you pay fees for their early repayment. These fees correspond to IRA (Early Redemption Indemnities) or PRA (Early Redemption Penalties). The amount of these penalties depends on whether you are paying off a home loan or a consumer loan. For the mortgage, the organization will charge you penalties up to 3% of the outstanding capital or six months of interest. For personal loans, the amount of fees corresponds either to 1% of the amount reimbursed if your loan exceeds one year, or 0.5% for less than one year.
Second, the redemption of your credits also entails costs on the side of the lender. First of all, you will have to pay an application fee for your new single credit. These fees vary between 1% and 5% of the amount borrowed. They are used to compensate professionals who have worked on your file. Obviously, these fees are only payable after obtaining your credit redemption. In addition, you will not have to pay them directly but they will be included in your monthly repayment installments. Regarding the repurchase of your mortgage, if you had resorted to a mortgage in order to ensure its repayment guarantee, you will then have to pay fees for lifting the guarantee, and also registering your mortgage for your new credit .
In addition, when opening this new loan, the financial organization will ask you to take out disability / death insurance. Even if this insurance remains optional, it is strongly advised by the banks. Indeed, in case of accidents of life, it covers you and your loved ones, for the reimbursement of monthly payments.
Not an expert in the financial field, you prefer to use a credit broker to help you in your various steps to obtain the redemption of your credits. Wise decision. Do not forget, only, that the services of a professional are always paying. You will therefore have to add the cost of its service to the other costs mentioned above.
All these new costs must be taken into account in order to calculate the profitability of the redemption of your credits.
Then, the advantage of redeeming your credits is to be able to group them into a single single loan with of course a single interest rate. Your expected earnings are at this level. For example, the interest rates on consumer loans or revolving loans are very high. They are in fact around 21% while for a loan repurchase, this new rate is around 6%.
Now it's up to you, alone or accompanied by an expert, to take stock of the expenses incurred by this new financial transaction and the gains that will be generated, in order to see if your credit redemption is really profitable.
10. Why can a loan buyback be refused?
When you make your credit redemption request, you should know that each financial organization has its own eligibility criteria. It is therefore important to canvass several structures in order to be able to evaluate their offers but also to have a better chance of obtaining your credit redemption.
If, however, your file receives several refusals, try to find the weak point in your situation. Without knowing it, your situation may be one of the most common refusal criteria:
- You have too high a debt ratio, greater than 33%. Banks or lenders will be afraid of your inability to repay.
- You are on the FCC, Central Checks file, managed by the Bank of United States. In this case, it will be impossible for you to obtain a repurchase of credit during the duration of your banking prohibition. On the other hand, if you are on the FICP file, national file of credit repayment incidents, you will not be able to obtain a complete repurchase of your credits but a partial repurchase is possible.
- Your professional situation or your income may be the reason for a refusal. Indeed, financial institutions will prefer applicants with permanent contracts for at least three years, with comfortable income than people with irregular income or a precarious situation. In this case you must then look for a co-borrower on a CDI who can provide a viable guarantee.
- You have had several rejections of bank withdrawals or an incident with a bank
- In the case of a repurchase including a mortgage, may be that the mortgage is not substantial enough to serve as a guarantee for the total amount requested.
Even if your file has been refused by several financial structures specializing in credit redemption, do not despair. Calmly review your situation. Use a credit broker who knows the tricks of the trade. He can better than you, reveal the strengths of your case, find the arguments necessary to convince the lender. In addition, bring more guarantees to your file, by being accompanied by a co-borrower. You can also sell certain goods in order to obtain more liquidity.
After all these steps, you always have the possibility to request the recourse of the Commission of over-indebtedness. The latter can then force financial organizations to adjust your credit in order to improve your situation, considered too critical.
11. Some pitfalls to avoid before starting out
Even if the offers presented by certain specialized organizations in the field seem attractive, the repurchase of credit remains above all a commercial offer. In this sense, you must therefore remain vigilant on the conditions for obtaining the redemption.
The very first trap to avoid is of course to subscribe to a credit buyback without having inquired before. So, do not hesitate to do some research on the internet, ask questions on the forums, talk to your banker or a broker if necessary. This information research will allow you to better understand what a loan buyback is and how it works. In addition, your banker or broker can provide you with valuable advice, tailored to your situation.
Then, the second trap would still be for lack of time, not to carry out an online simulation. Several platforms offer this kind of service free of charge. Its advantage is that it allows you to first take an inventory of your credits as well as the total amount remaining to be repaid. La simulation de rachat de crédit vous éclaire sur votre situation en vous indiquant le montant des mensualités que vous aurez à payer si vous désirez faire un rachat ainsi que la durée de ce nouveau crédit. Pratique, facile à utiliser et anonyme, la simulation est un outil indispensable pour avoir une meilleure idée de votre situation après rachat. De plus, ces plateformes vous permettent bien souvent de comparer plusieurs offres disponibles sur le marché.
De plus, ne contacter qu'un seul organisme vous limitera énormément. En effet, dans le pire des cas vous pourrez essuyer un refus de votre demande et en rester là. A noter qu'un refus dans un organisme ne signifie nullement que votre demande sera rejetée partout. Chaque structure a ses propres critères et normes de sélection. Dans le meilleur des cas, si le rachat vous est accordé, vous ne serez pas en mesure de pouvoir comparer cette offre avec d'autres. Alors qu'il est toujours favorable d'avoir plusieurs offres sous la main pour pouvoir par la suite renégocier l'offre si nécessaire.
Un autre piège à éviter: payer les services d'un courtier avant d'avoir l'assurance de l'accord de rachat et surtout du déblocage des fonds. Sachez cependant que la plupart du temps, le courtier prend une commission directement auprès de l'organisme qu'il a démarché. Ses frais sont bien évidemment répercutés, par la suite, sur vos mensualités. Mais dans l'immédiat, ne donnez aucun paiement directement au courtier.
Un piège assez subtil à déjouer est la hausse du taux d'intérêt du rachat de crédit. Effectivement, il arrive que le taux proposé lors du démarchage ne soit plus actuel lors de la signature du contrat. Pensez à bien vérifier le taux indiqué sur le contrat avant de vous engager définitivement.
Il peut s'avérer préjudiciable pour votre situation de vous laisser tenter par la somme d'argent supplémentaire proposée lors du rachat de crédit. Cette somme représente avant tout un nouveau crédit qui vient augmenter la somme totale à rembourser.
Enfin, le plus gros des pièges mais le plus encré dans les esprits est bien sûr de croire que le rachat de crédit est une recette miracle permettant de réaliser des économies. Cette opération financière va vous permettre de réduire votre taux d'endettement en diminuant le montant des mensualités. Mais n'oubliez pas, qu'il en rallonge la durée de remboursement. Sur le long terme, votre rachat de crédit peut devenir plus coûteux.
Un rachat de crédit n'est pas à prendre à la légère. Vous devez dans un premier temps bien vous renseigner, analyser les offres et voir si cette opération financière est vraiment rentable dans votre situation. Et n'oubliez pas qu'un rachat de crédit comme tout autre crédit, vous engage et donc se doit d'être remboursé.
10. Rachat de crédits -Conclusion
Pour résumer, le rachat de crédit correspond à une opération financière permettant de regrouper tous vos crédits, en un seul. Son principal avantage est de simplifier la gestion de votre budget en n'ayant plus qu'une seule mensualité prélevée par mois, à date fixe. Son deuxième avantage étant de diminuer le montant de ces mensualités, vous permettant de ce fait de retrouver un peu plus de pouvoir d'achat. Mais attention, toutefois, car en diminuant le montant des mensualités, la durée du crédit s'en trouve rallongée, ainsi que son coût. Afin de savoir si le rachat de crédit sera bénéfique pour votre situation, il est impératif de bien se renseigner sur les différentes offres disponibles sur le marché, d'effectuer une simulation de rachat en ligne et ne pas hésiter à se rapprocher des professionnels du domaine pour obtenir leurs conseils. En analysant toutes les offres, seul ou assisté d'un professionnel, vous devez être en mesure de calculer la rentabilité du rachat de vos crédits. Pour cela, vous devrez connaître et prendre en compte tous les nouveaux frais engendrés par le rachat de crédit ( pénalité de remboursement anticipé, frais de notaire, frais de dossier, assurance invalidité/décès, frais de courtage) ainsi que les gains attendu du changement de taux d'intérêt.
Cependant, restant une offre avant tout commerciale, malgré le fait que le rachat de crédit peut diminuer votre taux d'endettement, vous devez rester vigilant pendant toutes vos démarches. Pensez à vérifier notamment le taux d'intérêt de votre rachat de crédit avant la signature du contrat. En effet, le taux peut changer entre le moment du démarchage et la signature du contrat. Alors attention aux mauvaises surprises!
Concernant les démarches à entreprendre pour obtenir un rachat de vos crédits, plusieurs choix s'offrent à vous. Vous pouvez opter pour la demande en ligne, qui représente une solution simple, rapide et pratique. Son seul inconvénient réside dans le fait que vous êtes seul dans vos démarches. Vous pouvez alors vous rapprocher d'un courtier en crédit, spécialiste du domaine, qui saura mieux que quiconque défendre votre dossier auprès des organismes financier. Mais attention, ses services ont aussi un prix! Sinon, vous pouvez vous-même démarcher chaque structure, si vous en avez l'énergie et le temps. Le plus important est de disposer d'un dossier complet, solide en garanties pour pouvoir mettre toutes les chances de votre côté, pour l'acceptation de votre rachat de crédit.
Et enfin, sachez-que le rachat de crédit ne représente pas une recette miracle au surendettement. Il apporte un peu d'oxygène aux budgets devenu trop serrés par des prélèvements multiples. Et il donne, surtout, une seconde chance à des personnes surendettées, de pouvoir enfin assainir leur situation financière peu à peu et ainsi, d'éviter un aggravement de leur situation.