The repurchase of credit consists in regrouping a set of loans still in the course which has the final objective to lighten the monthly payments. This negotiated consolidation aims to lower the rates of each of the loans and to obtain an extension of the repayment term. This type of transaction is contracted with a bank, you can, however, compare many offers online via a credit redemption simulator.
Summary of the page
- 1 Find payday loan consolidation companies online
- 2 Falling monthly payments
- 3 Loans affected by the repurchase of credit
Credit redemption or credit consolidation has been created in Anglo-Saxon countries for over twenty years. It was in the early 2000s that the practice was imported France, to become a frequent remedy. The repurchase of credit or restructuring of loans in progress makes it possible to better manage the debt ratio of a household.
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The repurchase of credit includes the debt of household a single loan corresponding to the situation of this one. The budget of a household is found to be out of balance when the various monthly payments and the fixed charges together pass the bar of the 35% of the fixed incomes. It is in this sense that the takeover of credit takes place, whose role is to reduce the debt ratio below 35% of fixed income. Consolidate your loans at a cost, you relaunch yourself in a loan to cover all your current loans, so there are fees, insurance but also interest.
Loans in the process are notably bought back to be united in a single loan. Loans are financed by an amount equivalent to the total of these loans. This new loan will have a monthly payment in accordance with the budget of the family. Therefore, and usually, this technique significantly decreases the monthly payments. To obtain a credit redemption easily, it is advisable to go through a specialized broker or use an online comparator.
Falling monthly payments
Indeed the monthly payments decrease after a longer repayment period. When the repayment is spread over a longer interval, the debts are divided. As a result, the monthly payments decrease, but a repercussion will be recorded on the total cost of credit.
These monthly payments are lightened, too, thanks to the fall in interest rates after the renegotiation. The single loan is granted at a higher rate than in bank overdrafts or revolving loans such as a cash reserve of store cards.
However, it must be remembered that restructuring does not eliminate debts at once. It aims to make the burden of indebtedness less heavy in the daily life of the household concerned.
If you have any questions about credit redemption, we advise you to get closer to the specialized credit redemption forum.
Loans affected by the repurchase of credit
In general, the restructuring mainly concerns consumer loans, revolving loans, real estate loans and certain debts such as tax debts (housing tax, income tax, gift tax, etc.). This can also be applied to private debts such as cash flow following a divorce, a donation or an acknowledgment.
It should be noted, however, that if the household debt ratio is below 35%, the consolidation of the credits will only benefit the renegotiation of the rates and not the increase in the repayment period.