After several projects financed by consumer credit, they end up accumulating. It then becomes complicated to track their repayment with the many monthly payments. There is a simple solution to this problem: getting a buy back of consumer credit.
With a single credit, it will be easier for you to repay. It is also an opportunity to seize to reduce its interest rate or to finance a new project.
Define your need for buyback of consumer credit
A. Make an inventory of his debts
In order to submit a consumer loan buyback, you will have to list all your credits and debts. Thus, you can easily make your credit redemption request. Find below the various credits and debts to list in your file:
1. Consumer credits
A consumer loan is a loan contracted to finance a personal project or a purchase. These include the credits for:
– the purchase of electric appliances
– the acquisition of a car (new or used)
– making a trip
– work in the dwelling
– a cash requirement
2. Real estate loans
This credit is defined as being intended to finance a real estate purchase or a building construction operation.
Even if your application concerns only consumer loans, you will have to specify in your file if you have one or more real estate loans in progress. If you want to include the purchase of your consumer credit and your home loans, you will have to request a consolidation of credits.
3. Revolving credits
A revolving credit is a sum of money made available permanently against a high interest rate. If you have revolving credits, you can include them in your credit redemption request. The repurchase of this type of credit represents an excellent opportunity to lower the monthly payments of your repayments. Indeed, a repurchase of credit is proposed to you with a fixed rate.
4. Other debts
In your file, you will also have to specify all of your debts other than your credits. This can include:
– Late payment of property taxes, income tax, housing tax, etc.
– Late payment (water, electricity, telephone, insurance, condominium fees, …)
– A family debt
The credit redemption can also help you pay off late payments. By paying these debts quickly through a credit redemption, you will be able to avoid paying late interest and save money.
B. Make a budget
By realizing an accurate budget of your income and expenses, you can accurately define your need for a credit surrender. Whether it’s just consumer credit or other debt, a budget will help you make your decision. If you are applying for two credit buybacks, be sure to include your spouse’s income and expenses.
In this section you will have to enter all of your income each month. You must think in particular of:
– Your salary (or retirement)
– Social benefits
– A pension (of invadility, food, …)
– Land revenue
– Other income (annuities, dividends, bank interest, …)
As for income, you will have to indicate in your budget all of your monthly expenses. The most common expenses are:
– The rent
– The food
– The insurance
– Water, gas, electricity, heating, telephone, internet
– Loan repayments (consumption, real estate)
– Bank charges (interest on repayment, taken into account)
– Leisure, clothes, outings
C. The debt ratio
The debt ratio corresponds to the portion of your income that is dedicated to repayments of the monthly payments of your credits.
Once your budget is in hand, you can analyze your situation accurately. The simplest thing is to calculate your “debt ratio”. This rate is used by banks to define the repayment capacity of a borrower. There are no specific rules, and each institution chooses the maximum rate, beyond which it does not grant a loan. Credit experts often argue that a debt ratio of less than 30% is a financial situation
D. Prepayment charges
When you have signed your credit agreement, you may not have paid attention to the application of “prepayment fees”. These are withdrawn by the lending institution to compensate for the shortfall of a credit refunded before its term. Each loan is different, and you will have to consult your credit agreement in order to know the total amount of these costs.
E. Accompany the consumer credit buyback of a new credit
If you already have one or more consumer loans and want to finance a new project, the buy back of credit can be doubly useful. You can request the redemption of your consumer credits and a sum of liquidity for your new purchase. So you have the opportunity to finance your project while collecting all of your consumer credit.
F. The renegotiation solution
It is possible to go through a credit renegotiation rather than a credit redemption through another bank. Some banks and credit institutions are more likely to accept renegotiation than others. It all depends on your file and your request. The simplest for you will remain to announce your desire to renegotiate your credits to your bank.
Optimize your demand for buying back consumer credit
Making the decision to buy back consumer loans is a reasoned choice to find a healthy financial situation. In order to maximize the chances of acceptance of your file, we give you our useful advice.
A. Prepare your file
Whether you are applying for the purchase of consumer credit online or at a bank branch, your file must be complete. In particular, you must specify all of your consumer loans that you wish to redeem. You will also need to mention your other current credits (real estate, personal) as well as your other debts (late payment, family debt). The more accurate the information, the faster your file will be processed.
1. Consumer credits
Regarding the supporting documents of your identity, the credit agency will ask you several of them according to your situation, in the form of photocopies. We can mention in particular:
– Double-sided copying of the borrower’s (and co-borrower’s) national identity card or passport
– proof of residence of less than three months (water bill, electricity, telephone) if you have moved in the previous 12 months
2. Proof of your loans
In order for the organization to study your demand for the purchase of consumer credit, you will have to attach all loan contracts. In particular, all the general conditions of these credits must be included. You will also need to attach the personal credit amortization tables and the most recent revolving credit statements.
3. Proof of income
If you are an employee, you will need to provide your last pay slip. To this you will need to add a copy of your latest tax notice (the four slips). You may also be asked to provide a photocopy of the most recent statement from your bank account. This speeds up the processing of your file.
4. Proof of housing
If you own your home, you will need to prove it by adding a copy of your deed of ownership or deed of purchase. If you are a tenant you will have to attach the last three receipts of your rent.
B. Choosing the Right Intermediary for Credit Redemption
When looking for a buy back of consumer credit, several options are available to you. You can turn to a bank or a conventional credit institution. You will then be required to provide a complete file, and this organization will be compensated with interest earned or file fees.
Another solution is to use a “repurchase broker”. The role of this professional will be to evaluate your file, maximize its acceptability and present it to credit redemption organizations. In addition he will be mandated to find you the best possible body that corresponds to your needs. However, you will have to pay this expert and you will have to add this additional cost to the buyout.
A less expensive solution is to go through a loan between individuals to buy back its credits. In France, only Younited Credit is authorized by the Banque de France to connect individuals looking for a loan with individuals wishing to invest their savings. To do this you will have to go through a simulated credit redemption, however important point you will need to contact the credit institutions to make an early repayment.
C. Study the different options
When you request a credit redemption, you can choose between different options depending on your needs. Indeed, this purchase will allow you to decide, as far as possible, the duration or monthly payments to be paid each month. The proposed rate will be impacted by this arbitrage between duration and monthly payment as well as the total amount of the repurchase of credit.
D. Make a comparison of the proposals
If you compare several credit buy offers, we advise you to make your requests with the same elements in your file. Each establishment being different, they can offer you more or less interesting offers according to your request. Pay particular attention to the “total cost of credit redemption” which includes all repayments, interest, credit insurance and handling fees. For more information, you can consult our guide dedicated to the method of calculating a consumer credit.
E. With a new project
Getting a buy back credit and adding credit to a new project is quite possible. However, you will have to offer the same guarantees as for a personal loan to obtain this extra liquidity. For a quick and positive response, we advise you to present your consumer credit buyback file with all the necessary documents, as well as a complete presentation of your new project.
To conclude :
Getting a buy back of consumer credit can sometimes seem hard to obtain. But by preparing your file well and studying the different possibilities, you can maximize your chances of obtaining. And the interests of this type of credit redemption are numerous, you can gather in one single month your credits and get, depending on the case, a lower repayment rate.
There are different ways to redeem your credit, so take the time to explore all the possibilities. A repurchase of credit is like a classic personal credit and commits you; even if your credits have been redeemed, remember that you will have to repay the principal. To ensure the profitability of the operation of repurchasing your credit, we suggest you to consult our file on how to make sure that your repurchase of credit is profitable.