The credit buy-back mechanism
Credit repurchase is a mechanism that allows you to consolidate all of your credits into one. Thanks to this, the monthly payments paid every month are less than the sum of the previous installments, but the duration of the repayment increases. The repurchase of credit makes it possible to increase its remainder to live and to decrease the level of its debt.
The loan repurchase rate: an essential criterion
The credit repurchase rate allows the lending organization to generate remuneration in return for the credit granted to the borrower. A distinction is made between the nominal rate of the APR (annual effective annual rate). The first provides information on the interest rate on the loan. The second corresponds to the total cost of the credit for the borrower and therefore includes the nominal rate, but also the administration fees, the cost of insurance… It is therefore at the APR that it is advisable to refer to compare effectively two loan consolidation offers.
Credit consolidation may offer the opportunity to lower the rate of the consolidated credit, depending on the current credit rates. This is for example the case during a grouping including revolving credits at often high rates. The single rate of credit repurchase may be lower than that of revolving credit.
The consumer credit repurchase rate
The consolidation of loans into a single loan may relate exclusively to consumer loans and / or personal debts: a personal loan, a car loan, a revolving loan, a bank overdraft, etc. as well as late taxes, rent, unpaid invoices, etc. This is called a buyback of consumer loans, which has its own rate.
Mortgage loan redemption rate
The repurchase of mortgage credit allows an owner to group together a mortgage as well as various consumer loans and / or debts. The share of real estate in the total amount to be financed must then be at least 60%. Thus, the mortgage buyback rate applies, generally lower than the consumer loan buyout rate.
In this case, the amount and duration of repayment will often be greater than those provided for a consumer credit buyout. They will depend on the personal circumstances and the value of the borrower’s property.
Steps to obtain the best loan repurchase rate
Prepare your file well
Preparing a file beforehand is an asset to obtain a good credit repurchase rate: gather proof of your income, calculate your debt ratio, detail your project, explain your family and professional situation and your financial balance sheet, taking into account of your amortization schedules with capital and interest.
Use online simulators
Performing your online credit buyback simulation in just a few clicks will allow you to better visualize your possibilities. You can also use our credit buyout comparator to compete to find the best credit buyout rate.
Solicit a broker
Being accompanied by a loan repurchase broker will optimize the conditions for your loan consolidation and may allow you to obtain the best consumer credit repurchase rate or the best mortgage consolidation rate. Indeed, the broker is an expert who, after analyzing the profile of the borrower and his project, is able to offer him a personalized offer according to his needs, by competing with the various credit consolidation organizations. The broker also helps the borrower to build a solid file and offers real support, until the implementation of the loan buy-back solution.
Shorten the term of the loan
The principle of the repurchase of credit is precisely to spread a credit in the duration in order to lower the weight of the monthly payments. However, choosing the shortest loan duration from the proposals made by your broker allows you to obtain a better loan repurchase rate, since the repayment duration affects the credit repayment rate.
Use insurance delegation
Since 2010 and the adoption of the Condilaw company, any borrower has the right to choose a borrower insurance other than that offered by the lender. It is therefore possible to lower the proposed rate thanks to the insurance delegation. The group insurance rate is in fact most often calculated on the total amount of capital borrowed for the entire duration of repayment, it affects the basic rate of credit and considerably increases its cost. Conversely, a private insurer will calculate the rate on the capital remaining due, the cost will decrease over the monthly payments.
Other criteria for buying back credit
Obtaining a better credit repurchase rate is not the only criterion in a credit consolidation procedure. Other parameters count, such as the duration of the credit, the loan insurance rate, the nature of the credits to be refinanced, your profile, your project… To optimize your credit buy-back, ask our experts to get you the best conditions of credit repurchase. They are at your disposal to answer all your questions.