Many confuse renegotiation and repurchase of credit. However, these two transactions are very different. It is necessary to be able to distinguish in order to benefit from their respective advantages, especially in this period of falling rates. Details and explanations!
Loan purchase: definition and benefits
A repurchase of credit consists in establishing a brand new contract, even if it is a question of grouping in one single loan many loans. This approach must be motivated by the search for a lower rate and lower monthly payments. The common thread between credit restructuring and renegotiation is that they all allow for a clear improvement in repayment terms.
What types of credit can be consolidated? Your credit redemption can include several types of loans: leasing or leasing, home loans, consumer loans, bank overdrafts. Only gaming debts are to be excluded.
Different types of credit redemption
Credit redemption offers differ depending on the consumer’s profile:
- Repurchase of tenant credit: for tenants experiencing difficulties in repaying their debts. Individuals, persons exercising a liberal profession, employees can subscribe to it;
- Purchase of homeowner credit: is intended for private owners and tenants with real estate made available to their parents;
- Real estate loan buyback: allows to gather several real estate loans such as home savings loan, 0% loan, housing allowance, etc. ;
- Mortgage loan purchase: involves mortgaging real estate with a bank. To offer a guarantee in case of non-solvency;
- Purchase of consumer credit: only for consumer loans. Can go up to 100,000 euros.
Update on credit renegotiation
As the name suggests, it is renegotiating with his banker. The objective is to obtain better conditions taking into account the main characteristics of the first loan. This request must be accompanied by the drafting of an amendment.
The advantage of the renegotiation with regard to the repurchase of credit is that it is not subject to a lot of paperwork. Financial institutions asked for a consolidation of loans may require a change of bank domiciliation. Especially when it comes to grouping consumer credit. What solution if your bank refuses your renegotiation request? Just play the competition!
Steps to follow for renegotiation
Above all, it is important to evaluate the remaining cost of your loan and then determine the amount to be renegotiated. In simpler terms, you will have to add up the interest that remains to be paid. For the estimate of the capital remaining due, nothing easier. Simply refer to the amortization table and the date of the last monthly payment.
In a second time, consult your banker. In order not to misunderstand you, do a simulation. Try to see if for a loan similar to yours, the conditions are more interesting. If so, renegotiate your loan to enjoy the same conditions.
It is important to emphasize that renegotiation is a privilege and not a right. Last step then, flesh out your file with strong arguments. In principle, you must guarantee your solvency by alerting your banker to the regularity of your income. Also mention your insurance contracts will allow you to earn points. And, icing on the cake, do not hesitate to arm yourself with several competing offers!