It’s not always easy to find one’s way when one has contracted several credits. Monthly loan payments accumulate and the budget can quickly be out of balance. To remedy this delicate financial situation, it is possible to move towards a purchase of credits. An operation that consolidates all its loans into one in order to lower monthly payments and get better terms of repayment. Thanks to digital tools and the Internet it is now very easy and quick to find an offer to buy credit at the best rate in just two minutes, using online simulators and calculators.
What is a redemption of credits?
To simplify the management of your finances and improve a household’s budget balance, the purchase of loans is an optimal solution. In fact, it consists in redeeming by its own bank or by an external institution, all the credits still being refunded. The borrower will then have the opportunity to negotiate a lower rate and lower the amount of the monthly payment that will now be unique. In return, the total repayment term will be extended.
The credits concerned by a repurchase of credit are the following:
- personal credit for consumption
- car and motorcycle loans
- work loans
- real estate loans
It is also possible to include in a buyback transaction debts such as bank overdrafts or certain personal debts. On the other hand, it is good to know that a consolidation of loans can also include the release of additional funds to finance a project without subscribing to a new loan. As regards the basic regulation of bank credit, the borrower will have to respect the same constraints as for a conventional credit agreement with regard to advertising, mandatory information and prepayment rules.
How is the rate of a credit surrender calculated?
The interest rate is a percentage levied by the bank or credit institution, so that the bank or the lending agency gets money by lending money. The interest rate may be fixed or variable depending on market fluctuations. More attractive at first glance, the second option remains more risky and is aimed rather at people with a solid record and able to cope with a sudden rise in rates.
The interest rate may vary depending on a number of factors, such as the borrower’s income or personal circumstances. But whatever happens, it will be necessary to rely on the APR: the annual percentage rate. This is essential for comparing all online credit redemption offers and must appear on all documents. The APR consolidates and harmonizes the nominal rate, also known as the basic rate, the ancillary costs linked to the transaction, such as the application fees which vary between 1% and 1.5% of the total amount of the repurchase, as well as the insurance contributions. when the borrower chooses to have one.
In February 2019, here are some examples of the average rate applied:
- Buyback of consumer loans: 2.65%
- Purchase of real estate loans: 1.43%
Use a simulator and online calculator
To quickly compare the offers currently available on the market, it is possible to use an online simulator. There are now many platforms that offer Internet users to calculate their rate in just a few minutes.
For this, it is sufficient for the user to enter information such as income, resources, the amount and the number of credits to be refunded. The online calculator then generates, with all its information, a first estimate. Totally free and available 24h / 24, the simulator allows to know the following elements:
- The debt ratio
- The rate applicable to future redemption
- The remaining capital
- The amortization table
- The amount of the new monthly payments
This particularly effective tool allows a borrower to quickly have an idea about the bundling contract he may eventually obtain. Indeed, this is a first estimate that does not engage the applicant. The latter will be offered the possibility of receiving this estimate in the form of a quote which will be sent to him by email or by mail.
Solicit a banking intermediary
In order to find the best rate in record time, it is possible to solicit an intermediary in banking and payment services (IOBSP) such as a broker or agent. These industry professionals are expert in comparing online credit buy offers and allow their customers to find the best rate in two minutes. Thanks to their very wide network of banking and financial partners, these professionals have the opportunity to find and negotiate the best borrowing terms for their client and to really optimize a loan buyback.
Indeed, it is a complex operation that requires the study of several very specific points in order to effectively remedy its budgetary situation. That’s why an intermediary in banking is the ideal person to facilitate this process. He will take care of the entire operation, from the constitution of the file to the signing of the contract. It is a highly regulated profession in terms of both practice and remuneration. When a brokerage commission is invoiced to a client, it is generally estimated between 1% and 5% of the total amount of the transaction, depending on the complexity of the file and the client’s profile. These fees are only charged once the contract is validated and signed by all parties.
Finalize the operation by sending the file
To validate the quotation and to concretize a request for repurchase of credits the borrower will as soon as possible send to his bank or the organization praetor a file gathering a certain number of pieces. This one is not to be taken lightly and must be prepared with the greatest care because the more it will be complete and the more the processing time of the application will be fast. For a loan consolidation file, it will be necessary to provide the following documents :
- A photocopy of the identity card
- A photocopy of the family record book
- A photocopy of the marriage contract (if concerned)
- Proof of address of less than 3 months
- The housing tax
- Property tax (for owners)
- A canceled RIB or check
- The last three payslips
- The copy of the latest tax notice
- Employer attestation (date of entry into the company and duration of the contract for fixed-term contracts
- Certificate of Family Allowance or PLA (if applicable)
- Evidence of any other income
After a careful study of this file that can take three to five days, the organization will notify its client of its decision. The sums can be released after the effective signature of the credit buyback agreement within a maximum of three weeks. A consumer credit transaction is governed by the Consumer Code and as such a period of 14 days remains applicable.