Every month many withdrawals are made in your bank account. They correspond to all these little pleasures that have been granted overtime: the new computer financed through consumer credit, credit work for the construction of a terrace, the loyalty card of your store preferred regularly and with credit. But if you take a closer look, you realize that the interests of all these consumer credits are far too high. So why not trade all of these monthly payments for one, with a new unique credit and better management of your budget?
Don’t worry we offer the best credit consolidation loans
Having several outstanding debts does not mean being addicted to credits. It’s just a matter of sometimes taking advantage of a super low-interest rate to indulge yourself or a boost that helps to reduce expenses. If this strategy is an option in the management of finances, it can also be very expensive. Because among the consumer credit subscribed can also be renewable loans and these are excessively expensive. With rates close to those of wear, they currently oscillate between 8% and 20.87%. Moreover, if consumer credit conditions are not the best, the accumulation of all these deadlines can be expensive.
The best credit consolidation loan via our company serves precisely to reduce the number of monthly payments, so check out ConsolidationNow here. This is a financial package with a particular operation that helps put finances back on track. However, it should not be confused with credit renegotiation which means getting a better interest rate on existing credit. Most of the time we are talking about the mortgage that can be renegotiated with a rate revised downwards, which allows saving on interest paid in the long term.
When a loan is redeemed, several debts and loans are combined into a personal loan. The goal is, on the one hand, to pay less interest and on the other to reduce the amount allocated each month to the repayment of various credits, the operation has advantages. In general, a new loan automatically benefits from a higher interest rate than the old ones. When the retirement comes and there are still maturities of credits to pay while revenues are decreasing, it is also a suitable solution. Its specificity is that it allows extending the repayment period, which has the effect of being able in the process to reduce the amount of the monthly payment. This will have the advantage of leaving cash to enjoy life and not be stifled by debts. In addition, having to deal with a single contact is much more convenient and facilitates the management of the monthly budget.
Consolidation of loans makes it possible to buy back all the loans, whether they are linked to a store card, consumer loans, revolving loans, car loans, motorcycle loans, work loans, etc. Regardless of the interest rate at which they were subscribed, whether fixed or variable. Finally, all outstanding debts can be grouped together. It is still necessary to verify the conditions to which they have been subscribed. If, for example, the borrower has benefited from a zero-rate eco-loan, it would be a pity to include it in the redemption of credits because he enjoys a benefit that does not exist anywhere else. Ditto for a consumer credit whose rate is below 3%, it will be difficult to find a better offer.
Another type of credit that is not interesting to include in the grouping is those with a repayment term of fewer than 6 months. Because for them, the gain in interest will be no consequent and it will be better to keep it and finish repaying it. However, it will be necessary to check whether, during the repayment period, the borrower will have the capacity to repay the new credit put in place under the repurchase and that with the remaining monthly payments.
Another important element in a loan consolidation operation is the possibility of integrating the bank overdraft in order to get back on sound management of its finances and its account. Finally, a new project, such as the purchase of a car or the completion of work can also start from the financial package of the purchase of credits.
Mode of operation of the redemption of credits
To be eligible for the redemption of credits it is necessary to respect certain unavoidable conditions which are:
- Not to be added to the FICP ( Personal Credit Loan Incident File)
- Have a maximum debt ratio after the repurchase transaction of 33% (40% in some cases and for profiles with comfortable incomes)
- At least one homemaker must be employed on a permanent contract
- The minimum income from the home and the aid must preferably be 500 euros
Depending on the credits that are to be grouped, there are several possibilities. For example, if only a mortgage is in progress it will be necessary to turn to the renegotiation of the rate, whereas for the redemption of credits it is necessary to:
- Minimum 2 consumer credits
- 1 credit consumption and a bank overdraft, debts or a new project to finance
- 1 home loan and several consumer loans
- 2 or more real estate loans
The code of consumption obliges all credit organizations and banks to provide a detailed offer. This is a summary of all the terms and conditions of the new loan taken out as part of the repurchase of outstanding credits. It must include the amount of the monthly payment, as well as the rate and fees. The Lagarde law authorizes a borrower to subscribe to a personal loan of up to 75,000 euros. The proposed reimbursement must, of course, depend on its financial capabilities.
The lengthening of the duration of the credit will certainly lower the amount of the monthly payment, but the consequence of this comfort will also be an increase in interest paid. It will be necessary to watch the rates offered by financial institutions and why not also turn to banks that offer sometimes interesting offers.
Most major banks and specialized organizations offer to pre-fill an application on their site. By indicating the number of credits to be redeemed and their amount, a first estimate of the maturity is given very quickly. This tool also makes it possible to play the competition and compare the different proposals received.
When the personal loan offer is underwritten, the law allows for a 14 day retraction period, or only 7 days upon the express request of the borrower. The credits in progress will be sold directly by the organization or the bank which carried out the regrouping operation.
However, it will be necessary to take care of the expenses and indemnities of prepayment. The application fees, for example, can be included in the APR (annual percentage rate of charge), which includes all ancillary costs, the interest rate, and the credit insurance. Sometimes for a consumer credit of more than 10,000 euros prepayment fees may be claimed, they are capped at 1% of the outstanding amount for a remaining credit term of more than one year, and 0.5% for a period of less than one year.