Loan consolidation, or repurchase of credit, refers to a banking technique of budget restructuring intended for all those who wish to benefit from a refinancing. As its name indicates, it allows to group all the credits of a household in a single low rate loan.
In which situation do you use loan consolidation?
To redeem credit is to protect yourself against any financial deterioration. For example, a job loss can cause a drop in income, as well as a retirement, or a divorce. And it is precisely through a loan buyback that it is possible to reduce the budget.
Simulate your loan consolidation Loan consolidation also proves to be the solution for the vi excessive debt to avoid the downward spiral of over-indebtedness.
The benefits of buying back credit for your loan
By completing a loan consolidation, you will not have to manage a single loan. Also, you will only be liable to one institution. In addition, the purchase of credit allows you to reduce your monthly payments by up to 60%. This will save you purchasing power and help you manage your budget more easily and securely.
Mechanisms for buying back your loans
The redemption credit rate may have a variable or fixed rate. Variable, it is revised each year on the anniversary date of the signing of the loan consolidation agreement. It can therefore increase or decrease according to a reference index. That is why it is advisable to bet on the fixed rate, the objective being to better manage its budget.
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How to succeed in buying back credit?
The repurchase of credit is not without risk, so do not neglect any detail. In addition to the APR (annual percentage rate of charge), the total cost of the financial operation, and in particular the new credit, must also be taken into account. In addition, you should also know that the longer the repayment period, the higher the cost of credit. The same goes for the additional financing, despite the decrease in the amount of the monthly payments, the latter can inflate the cost of the new loan. In short, do not hesitate to carry out a simulation of online credit redemption, to make sure that the characteristics of the new loan are adapted to your financial capacity.
It is obviously easier to manage your budget with a single loan in place instead of several. This is the reason why many banks offer consumers to opt for a loan consolidation, when they have subscribed to several loans they have trouble managing. Indeed, loan consolidation plays an important role in simplifying your budget management.
Simulation pooling of credit at the best rate
Reduce monthly expenses with loan consolidation
When a borrower subscribes to several credits, he may be unable to pay his bills as his debts accumulate.
When is loan consolidation necessary for your credit?
Borrowers can turn to credit buybacks for a variety of reasons. In most cases, the risk of over-indebtedness is one of the first reasons for consumers to use loan consolidation. In addition to the risk of over-indebtedness, some households may choose to pool their loans, to repay under more favorable conditions.
Many who choose to restructure their current credits do so to lighten their monthly expenses. They can be very heavy. They can also opt for the purchase of credit to optimize their ability to repay and have the opportunity to make a new loan, once all their debts settled. It can also be advantageous to use loan consolidation if at the time of signing your outstanding loan agreements, the interest rates applied were quite high.
With the repurchase of credit, you can renegotiate certain conditions, in order to benefit from a decrease of the monthly charges. However, the proposed conditions for loan consolidation may differ from bank to bank. It is therefore important, before any commitment, to compare the available offers and to simulate the loan to find the offer whose terms are the most flexible and the most advantageous for your finances.