Buy back consumer credit: review your debtUncategorized
The purchase of consumer credit is the solution in the event of a budgetary imbalance. When you are left with too many credits to repay each month or declining income, it is often necessary to consolidate your credits to lower the monthly payments. However, you really have to be careful with the terms of the loan buy-back which can be very expensive.
Consumer credit buy-back: the main principles
The purchase of consumer credit in summary
It falls into the category of credit consolidation. It lowers the monthly payments that are reimbursed each month by extending the repayment period. The purchase of consumer credit works according to the following main principles:
- Debts eligible for redemption: consumer credit – car loan – work loan – revolving credit – debts with supporting documents
- Amount: $ 3,000 – $ 100,000 (but it is possible to obtain credit repayments of a larger amount depending on the profiles)
- Duration: up to 144 months
- Fixed taeg rate: between 4% and 6% (subject to the application of wear rates)
- The debts will be directly settled by the organization carrying out the repurchase
The consumer credit buy-back operation therefore consists of rebalancing a monthly budget whose debt ratio is too high. However, a credit consolidation is expensive because by extending the term, the cost of the loan can skyrocket. It is therefore important to compare the rates of redemption of consumer credit before signing.
NB: It is not specifically a redemption of car credit. This type of grouping is specifically linked to the resale of a car bought on credit. Besides, as we explained in our article, this is not a buyout of consumer credit.
Retail consumer credit repurchase
Redeeming consumer loans consists of taking over all your loans in a single new loan. The repayment term of the credit repurchase will be extended enough to lower the monthly payment to an acceptable level in terms of income. A good buy back of consumer credit generally makes it possible to go from a debt ratio of more than 50% to less than 30%.
On the other hand, by lengthening the duration of the consumer credit buy-back, the total cost of the loans is increased. The aim of the operation is therefore not to lower the total cost of loans. The objective of buying consumer credit is to get out of bad debt by lowering the amount of monthly payments to be repaid each month.
Example of consumer credit repurchase
|situation before buyout||situation after buyout|
|Car loan ($ 10,000)||300 $ / month||0 $ / month|
|Revolving credit: 4 ($ 6,000)||400 $ / month||0 $ / month|
|Personal loan ($ 20,000)||370 $ / month||0 $ / month|
|Purchase of consumer credit ($ 36,000 + $ 4,000 cash)||493 $ / month|
This example clearly shows the possibilities of lowering its debt ratio. It also helps you understand what a cash buyback is. It is often necessary to need cash when you want to repay your debts. Whether to carry out projects that had been postponed until then or simply to settle non-justifiable debts.
Mortgage loan redemption
The repurchase of consumer credit differs from the repurchase of mortgage credit. The latter is used if there is a home loan in the credits to be taken over. The repurchase of consumer credit is therefore intended to group only consumer credit or even justifiable debts. (See the Lafinancepourtous.com site set up by the Public Service)
How to get a consumer credit buyout?
To obtain a buyout of consumer credit, it will go through several stages.
- Perform a consumer credit buyback simulation
This step consists of listing all of his credits, clearly identifying for each of them what the monthly payment is and how much is left to repay. You must then enter these data in a consumer credit buyback simulator. Our credit comparator, like buyout organizations, offers this simulator.
- Choosing the right monthly payment for the right debt ratio
Even if this variable can be reviewed with the financial companies that will make the purchase, it is important to determine how much one is ready to repay each month at most. This is what will define the duration of the redemption and therefore its cost.
- Obtain an agreement in principle
Of course we recommend carrying out a comparison of the rates offered before but obtaining an agreement for a buyout of consumer credit is not so simple. This is the reason why it is better to make several requests. You must complete a credit repurchase questionnaire online, either on our comparator or directly on the sites of the organizations chosen. Once the questionnaire has been completed, a decision in principle is obtained immediately or within 24 hours. It may be better to make multiple requests to increase the chances of getting a deal.
- Prepare your consumer credit buyback file
It is not the simplest step but it is essential. To give a final agreement, banks and credit organizations need to check on supporting documents the detailed situation of their future customers. Once an agreement in principle has been obtained, in order not to waste time, it is preferable to immediately prepare your file with in particular: Proof of identity, domicile, pay slip, tax notice, amortization table for outstanding loans, bank account statements, revolving credit account statements, etc.
- Obtain a final agreement
The final agreement is given by the organizations having given a first agreement in principle after studying the supporting documents. It is therefore possible that requests to buy back consumer credit will be refused following an initial agreement. However if the repurchase of credit is refused and that one made only one request, the situation will be complicated and it will be necessary to start all over again. This is also why it is preferable to file at least two requests. This agreement is obtained after providing the supporting documents, generally within a few days. If you obtain several agreements, all you have to do is choose the cheapest credit.
- Clear credits
It is important to know that it is the organization that makes the purchase of consumer credit that will directly settle the credits to be reimbursed. The borrower has nothing to do. It is therefore important not to start repaying credits on his side. Once all the credits have been repaid, the monthly repayment is set up.
Conditions for obtaining a consumer credit repurchase
To obtain a consumer credit buyout, each financial institution has its own rules. However, in practice, there are certain rules which seem essential to obtain an agreement:
- At least one permanent contract at home
- Total household income> $ 1,500
- Being a tenant or owner
- Be at least 25 years old
- Not to be filed (there is a credit redemption with overdraft)
- Debt ratio after redemption <40%
Who are the consumer credit buyout organizations?
We have listed the main credit buyout organizations. The important thing to remember from this list is that the grouping of consumer credit is very little proposed by the banks. We have analyzed many offers such as the takeover of Capital lender, we systematically arrive at the same conclusions for all banks: They never position themselves on consumer credit for customers they do not know. So at best, it is his own bank that could make a proposal. And there again, they consider this type of request “at risk” and will not do everything for the customers who request it.
Of course, there are consumer credit organizations like Best Bank or Lender bank. They are clearly positioned in this market even if they are not the greatest specialists. Generally, they position themselves well up to buyouts of $ 40,000. And it’s also easier if one of the loans to be taken over is managed by this organization.
Specialists in the purchase of consumer credit. They are of two types. There are either credit repurchase brokers or lending organizations. The best performing lending organizations are little known as Cream bank. They are still from large banks. They take a very large part of the market because they are the ones who know best how to accept a buyout of consumer credit. Brokers have real importance in this market because their added value is knowing which organization will accept which file and at which price. This is the system that we have implemented automatically.