The operation of the operation
When a borrower plans to buy a loan, he does not need to switch banks. It is quite possible to buy back credits from your own bank. This is a financial package that allows both to see its debt ratio decreased and why not to free cash in order to achieve a new project?
A credit buyback operation consists of raising all outstanding loans by subscribing to a new loan. It is the bank that will therefore be responsible for the repayment of credits from creditors. Advantage? The borrower only reimburses one reduced monthly payment * and benefits from a favorable rate. In return, the repayment term is extended and the total cost increased. Different types of loans, purchased in separate institutions, can be bought back:
- a mortgage
- a personal loan
- an assigned credit (auto credit, credit work,…)
- a bank overdraft
These loans may be subject to partial or total surrender. In fact, it is possible, for example, to keep your home loan subscribed at a low rate as soon as it is signed, and to combine only its consumer loans.
To ensure the granting of a loan consolidation by its bank, the constitution of the file is a crucial step. This will allow the banker to have a clear view of the client’s financial situation.
The cost of a credit redemption
In order to obtain the most financially advantageous offer, it is important to negotiate all the terms and conditions that will apply to the new credit. It will thus be necessary to calculate the new rate proposed by verifying its compliance with the annual percentage rate of charge (APR) in force. This will then determine the amount of monthly payments to be made and establish the new repayment term.
This operation, which is financially advantageous in the short term, requires a good calculation of the various costs inherent in this arrangement, such as:
- application fee
- the amount of the early redemption payments (IRA) applicable to the loans concerned by the redemption
- costs related to the closing and the opening of an insurance contract
- the cost of a possible mortgage release
Whatever the solution, a loan buyback is a particularly effective operation when a household budget is stifled by many credits or a new project is born.
Find the best deal in an outdoor facility
In case of refusal from the bank of origin, nothing prevents to turn to another organization to redeem its credits. By playing the competition, it is possible to obtain really interesting rates.
In this case, it will once again be necessary to ensure the solidity of its file and to seek the offer adapting itself to the needs better. The costs and the sums to be disbursed are also the essential criteria to be taken into account. Faced with the many proposals made by market players, it’s not always easy to see clearly. To make a choice, two options are possible: contact a broker or perform online simulations alone thanks to the many tools available on the internet. Thanks to their speed, it is possible in just a few clicks to get a clear idea of the amount and conditions of the future loan consolidation.
Choosing a broker can be interesting because he is an intermediary specialized in financial and banking matters. He will be able to better guide his client through the various steps and steps of a loan consolidation. A broker will also be able to refer a borrower to the most appropriate solution.