Repurchase of credit, consolidation of receivables, restructuring of debts, reorganization of loans… As many terms to indicate a single and same operation which consists in regrouping all its credits in progress in only one and single contract in order to reduce the monthly payments. Very widespread in Anglo-Saxon countries and in Germany, this financial technique is enjoying growing success in France.
Credit repurchase: how does it work?
Credit consolidation, more simply called repurchase of credit, is a financial technique straight from Anglo-Saxon countries in the 90s. In France, this practice was not widespread, even confidential at the start, but it developed from significantly since the start of the crisis.
Its principle is simple. When an individual is faced with an overflow of credits that he can no longer repay, he has the option of having them “bought back” by a competing establishment.
If its request is accepted, the requested organization will grant it a new loan, replacing its previous credits, with lower monthly payments and a generally longer term.
Who is the credit buyout for?
The repurchase of credit is accessible to all, whether employees, executives, civil servants, retirees or young workers … This solution is equally suitable for people wishing to find a more stable financial situation after a life accident (unemployment, illness, divorce…) than to those who wish to regain purchasing power, or to seniors who face a decline in their retirement income.
Why buy a credit buy-back?
When you have accumulated and multiplied the loans, the repurchase of credit remains the suitable solution to take again its budget in hand. In the current low interest rate environment, now is a good time to take the plunge and return to a healthier financial situation.
Precautions to take
However, it should be borne in mind that this operation generates additional costs, which must be taken into account before launching: early repayment indemnities (IRA), mortgage lifting costs, deposit transfer costs, etc.
Given the complexity of this operation, the support of a loan repurchase broker is indicated to carry out your project.