Households with multiple consumer credit can turn to credit buybacks to reduce the loan burden on their monthly budgets. This operation consists in bringing together in one and the same loan all the credits in progress. These may have been purchased on different dates and for varying amounts. It is therefore a customizable montage depending on the situation of the borrower. The objective is to reduce the monthly payments, the choice of the establishment and thus the rate in force is essential for the operation to be a success.
What is a consumer credit buyback?
A buy-back of consumer loans, also known as loan consolidation or debt restructuring, is an operation that consists of repurchasing outstanding loans in order to sign a new contract that includes all of them. They can be redeemed either by their own bank, by another bank or by a credit agency.
The main advantage of this operation is that it is possible to renegotiate the interest rate that will apply to the new loan. Therefore by obtaining a more advantageous rate, it is possible to reduce the monthly payments to be refunded. In return, the total repayment term will be extended over a longer period.
The purchase of consumer credit is an optimal solution to avoid being in a situation of over-indebtedness and to reduce the expenses related to the repayment of too many consumer loans.
The types of credits involved in this operation
Owners as well as tenants are eligible for a buy-back. A consolidation of consumer loans concerns the following loans:
- personal loans that finance consumer goods in a free and unsupported way
- assigned credits that are dedicated to the purchase of a single property and require a quote
- car / motorcycle loans used to finance a new or used car or motorcycle.
- works credits for the repair or renovation of a dwelling
- boat credits that are intended for the acquisition of a boat
- revolving credits or revolving credits which are a reserve of money made available by a creditor to a borrower who is reconstituted at each use.
- student loans: funding for young people aged 18 to 25 to finance their studies.
Finally, it is also possible to include certain debts in a purchase of consumer credit. These may be bank debts, personal debts or family debts.
The different steps to make a loan consolidation
The first step to redeem consumer loans is to find the offer that best suits your needs and your means. For this the borrower can call a broker or do his own research. By studying precisely the different offers on the market, a borrower will have the opportunity to compete and negotiate a better rate and more favorable terms of repayment.
Once the offer has been chosen, the borrower will have to create and send an application file. Many supporting documents will have to be gathered, which is why it will be necessary to go quickly to speed up the start of the procedure and the implementation of the operation.
Before agreeing, the requested institution will convene a committee of experts to study the solvency and financial soundness of the future client. In most cases, it is possible to receive a proposal and therefore an agreement in principle within 10 days. The institution will then send an offer to the borrower and an initial version of the consumer credit purchase agreement.
He then has 10 days to accept or reject the proposal. Good to know: the borrower is only engaged from the moment the two parties have signed the contract.
In application of the code of consumption and the Lagarde law put into effect in 2014, a withdrawal period of 14 days will then be applied. At the end of this period, it will take between 10 days and 3 weeks to release the funds and that the creditors are all paid.
Perform an online simulation to find the best offer
It is not always easy to see clearly among the many offers currently available on the market. That’s why there are so many platforms on the Internet that offer an answer and a quick overview of a possible bundling offer.
Thus, to facilitate your search, it is possible to use an online credit redemption simulator. Very effective and completely free, it allows to obtain a quote in just a few clicks. To do this, all you have to do is fill in the requested information such as household income, assets, expenses, the number, the rate, the amounts remaining due and the duration of the credits concerned by the purchase.
By receiving all this information, the online simulation provides a complete overview of the cost and feasibility of the project. On some sites, it is possible to obtain a first agreement in principle within 24 hours. Using a consumer credit buy-back simulator is very effective in getting the competition to compete and getting a sense of the future offer.
The mounting of the file: an essential step
To ensure the acceptance of your file and the validation of your request, it is essential to consolidate the most complete file possible. The higher the quality, the greater the chances of getting a favorable response. Here is the list of the mandatory documents to be provided when applying for the purchase of consumer credit :
- – a copy of your ID (valid)
- – a copy of the family record book
- – a copy of the marriage contract
- – proof of address (EDF and telephone bill)
- – the housing tax
- – a copy of the property tax for the owners
- – a bank account number
- – the last three payslips as well as the one from December of last year
- – a copy of the last pension bulletin
- – a copy of the latest tax notice
- – a copy of the attestation of the family allowances and / or the APL
- – proof of any other type of income
- – a copy of the last three months of all bank statements
- – a copy of the loan offer and amortization schedule for personal loans (last statements or proof of capital remaining due if no schedule)
- – a copy of loan offer (specific and general conditions) and amortization table for the mortgage
- – a copy of the complete title deed
- – a copy of the estimate real estate agency or notary of your property
- – a copy of the home insurance (valid)
- This file will be thoroughly analyzed by the expert committee of the chosen institution and will reflect the borrower’s debt capacity and income.