Redeeming credits involves properly assessing the associated costs. Indeed, this operation is profitable only if the savings achieved are greater than the expenses in reimbursement costs.
The repurchase of real estate or consumer credit consists of consolidating existing loans into a single credit in order to benefit from a reduced monthly payment. The various costs related to this operation are due only after acceptance and signature of the contract.
Early repayment benefits (IRAs)
The institution responsible for setting up the repurchase of credit will settle the credits subscribed with the creditors. As such, you will have to pay early redemption fees representing the equivalent of 6 months of interest at the time of redemption but can not exceed 3% of the outstanding capital. These penalties will be incorporated into the cost of your new credit.
The repurchase of credit involves the subscription of a new loan and therefore a new guarantee. It may be a mortgage allowing the creditor to seize the property if it is not repaid in due time. The amount of this guarantee represents nearly 2% of the amount of the loan, to which must be added the land registration tax. It can also be a bond involving the payment of a commission of between 2 and 3% of the borrowed capital.
The repurchase of credit also requires the subscription of a borrower insurance. Thus, if it is impossible for the borrower to repay the remaining monthly payments, the insurer will take over. The bank systematically offers its group contract. Nevertheless, you do not have to subscribe to it. The Lagarde law of 2010 allows you to join an insurance of individual loan offering guarantees at least equivalent. The delegation of insurance often leads to significant savings.
The bank that will set up the credit redemption will require a processing fee corresponding to about 1% of the amount borrowed. Like the credit rate, these fees can be negotiated according to the quality of your file. It is important to specify that a simple study with a bank or a broker can not result in the payment of fees.
Tips to reduce the cost of your credit surrender
Do not take too much risk
To lower the rate of the new credit, the bank can offer to move from a fixed rate to a revisable rate. The loan rate will then be revised periodically according to the evolution of the Euribor index. Opting for a variable rate loan therefore involves a certain amount of risk and requires keeping control of the risk.
How to choose your credit repurchase agency
The choice of the credit repurchase body is important. Privilege recognized institutions, with a global quality relationship. A broker can put you in touch with partner banks offering offers tailored to your needs.
Play the competition
To find the best credit buy offer, it is recommended to use a 100% free online comparator. In concrete terms, you just need to fill out a quick form to access the most attractive offers on the market.
Take into account the total cost of credit
Banks often offer their clients a loan for a longer period to reduce the amount of monthly payments. However, keep in mind that this will mechanically increase the total cost of the operation.
Thus, it is essential to properly assess the costs associated with the repurchase of credit before its implementation because this solution is not always profitable.