Redeeming your credits is an operation that can be very profitable for your finances. But be attentive to the conditions, indeed a repurchase of credit can sometimes make you lose money.
We bring you the keys to know if your project of repurchase of credit is really profitable.
Preparation of credit repurchase dossier
Before launching yourself body and soul in the search for a solution to buy back your credits, take the time to properly prepare your file and compare the different offers. Each file is different and depends on your situation, your request, and the credits you wish to redeem.
But debts contracted with your loved ones, delays in paying your invoices or unpaid debts with the public treasury can also be included in the buy-back request.
We generally gather under the term “personal loan” all the credits which are intended to finance projects like a new car, work in its housing or the organization of its marriage.
This type of loan is very widespread because it allows you to find financing quickly and thus does not have to wait to realize your desires. But on the other hand, if you combine several personal loans, it may be worthwhile to buy them back in order to pay less for your monthly repayment.
If you have an older home loan with a higher rate, you can have it repurchased to pay less interest. In the end, you will reimburse less money, and you will also be able to negotiate the price of insurance for this mortgage which represents a significant cost.
If you have unpaid bills and an accumulation of late payments, you may have to pay a lot of late interest. By incorporating this type of debt into your loan repurchase, you can find a more manageable financial statement with a single monthly payment to repay these debts.
A. Analyze the redemption and negotiation costs
Two types of costs can be identified: those relating to the repurchase of capital and interest which are a function of seniority, and the penalties which are due in the event of early repayment.
The age of the credits:
Most credits include one or more clauses concerning the total or partial repayment of the amount borrowed; since it ultimately amounts to early repayment through the repurchase of credit.
Depending on the age of your loan and therefore your duration of engagement with the credit organization, the cost of early repayment may be higher or lower.
A bank earns money when it lends it and earns interest. The longer the repayment, the more money the bank will earn. It, therefore, makes sense that if you redeem your credit early, you will have to pay more than if you apply when a large part of the principal has already been repaid.
Because when you buy back credit, you have to repay the principal and interest due. But buying back the credits at a lower rate, and a lower monthly payment can save you money in the long run.
Penalties due to early repayment:
You may also be asked to pay penalties in order to be able to make an early repayment through a buy-back. This type of penalty only concerns mortgage loans, indeed personal loans can be redeemed without having to pay a penalty. In general, the amount of the prepayment or redemption penalties is equivalent to 3% of the amount owed.
B. Finding your credit repurchase intermediary
Many organizations offer their services to buy back their credits. You have the choice between a traditional establishment such as a bank, or you can make your request to buy back credit directly online. You can also hire a broker, but the broker will bill you for their services based on your request and its complexity.
It is possible to renegotiate with your bank your credits, but be attentive to the conditions which are proposed to you. Indeed, some will not hesitate to force you to pay fees or worse, force you to open accounts whose management is chargeable to recover their stake.
The best solution will then remain to proceed to the repurchase of your credits by repaying in advance directly with your creditors. All you need to do is request a simulation of credit repurchase between individuals, as proposed by Younited Credit.
C. Watch out for credit repurchase scams
We advise you to be very attentive to offers to buy back credit from certain organizations. First check that it is approved by a body dependent on Good Finance, such as the ACPR (the Prudential Control and Resolution Authority), or mandated as an intermediary in banking operations (IOB) by one or more financial institutions.
Then, take the time to determine if the operation of buying back your credits is profitable, by comparing the cost of repaying your initial credits against the total cost due after the redemption of your credits. Some organizations, however well approved, will not hesitate not to try to scam you.
This is particularly the case for certain credit repurchase brokers who ask you to pay fees to study your file. They should not ask you to pay such fees before the final acceptance of your file and after you have signed it.
The profitability of a credit repurchase
The main interest of a credit repurchase is to be able to regroup all the monthly payments in only one and to decrease it, and as far as possible lower the total cost of the repayment of the capital.
A. Profitable Personal Credit Redemption
Personal loans represent a good part of the demand for a loan buy-back. This is why it is important to define precisely whether buying back such credits is profitable or not. The law requires that no penalty should be paid in the event of early repayment or redemption of credit.
To make the repurchase of this type of credit as profitable as possible, we advise you to take part in its repayment by contacting your creditors for the repayment of your previous debts.
Thus you will save the money that you ask for example a broker or an organization specialized in the grouping of credits.
B. Buyback of profitable home loan
Home loans are also eligible for loan repurchase, but they are also very often renegotiated directly with the lender. Redeeming a loan made as part of a real estate project can also be an opportunity to renegotiate or change insurance and thus reduce its cost.
The repurchase of a mortgage requires a little more time, and above all very often concerns fairly large sums.
This is why it can be tempting to ask an organization to take charge of the necessary steps. But brokerage fees can be in the order of 5% of the amount of the new loan, so it is important to measure whether the interest of involving a broker is essential given his remuneration.