Subscribing to many loans can end up hurting your financial situation. It only takes one life incident resulting in a drop in income to make it difficult to repay these loans. To avoid over-indebtedness, opting for a loan buy-back will allow you to adapt your monthly expenses to your income.
The solution of buying back credits helps people in financial distress to straighten out their budget. Also called consolidation of credits, this financial operation consists of bringing together in a single credit all the loans and outstanding receivables of a borrower. In this way, the latter will only have a single loan, a rate, a schedule and a single reimbursement to settle with a single financial institution. The operation will help reduce the cost of monthly payments to allow the borrower to benefit from better purchasing power. In return for this advantage, an increase in the repayment period is to be expected, which involves additional costs.
In accordance with the regulations, for a repurchase of credits to be possible, the borrower must have at least two claims including a loan. It is possible to consolidate not only loans but also debts of all kinds, bank overdrafts and many more. The contract may fall under the real estate loan regime if the share of real estate exceeds 60% during the consolidation. If this is not the case, the legislation in force relating to consumption will be applied.
Note that the repayment period is a key element of the redemption of credits. At the time of consolidation, the bank will be obliged to spread this repayment period over time, otherwise it will not be possible to reduce the monthly payments. This extension does not exceed 35 years if it is a question of a repurchase of mortgages and 12 years in the case of consumer loans.
Due to divorce, illness, accident or job loss, some people can no longer make ends meet. The repayment of credits becomes complex because of the drop in income. Eventually, the borrower risks falling into the spiral of over-indebtedness which is dangerous for him because he may become banned from banking or be registered with the FICP (file of incidents of repayment of loans to individuals).
In order to avoid finding yourself in this delicate financial situation, it is preferable to opt for a repurchase of credits with the key, the reduction of the amount of the monthly installments. This drop can even reach 60%, enough to ventilate the borrower's budget and allow him to start on a good basis. In addition to the reduction in monthly payments, the repurchase of credits simplifies the situation of the customer. The latter no longer has to deal with several banks at the same time to whom he owes money since now he is only indebted to a single financial institution. Budget management thus becomes easier and the borrower is more serene.
