Nowadays, consumer loan rates are so advantageous that most individuals are tempted to ask for them from financial institutions. However, the vagaries of existence lead to inevitable situations that make some people can no longer meet deadlines. In case of difficulties to pay the monthly installments of a loan, the recourse to the purchase of consumer credit is an option to consider.
General information on the purchase of consumer credit
This type of buy-back only concerns consumer loans (auto loans, personal loans or loans, revolving credit, etc.). It is an operation that can solve the problems of individuals who have to repay several loans. It consists of collecting these loans in a single contract with a third-party financial institution.
In this contract, it will be the contracting financial institution that will settle the debts due to the creditor banks of the individual. However, it will be up to the individual to repay this amount monthly to the financial institution concerned. Given the particularity of the contract, a new APR and a new repayment term will be set.
In addition, other loans can be included such as family debts and other late payments (invoices) as well as the financing of new projects. The maximum amount of repurchase of consumer credit varies according to each institution (between 50,000 to 90,000 euros) but the repayment term is limited to 12 years.
What are the interests of buying back consumer credit?
For this operation to be done, some documents must be provided. These include amortization schedules for credits to be repurchased, the pay slip, tax notice or sometimes the FICP or record of incidents of payment of loans to individuals. Some banks also require the conclusion of insurance for the loan. These coins will allow the new bank to examine the client’s financial position, debt capacity and solvency.
The benefits of buying back consumer credit are numerous. In the first place, the person concerned benefits from a reduced rate and a prolonged reimbursement, thus avoiding paying several deadlines per month. Secondly, the risk of over-indebtedness is reduced and the person can still retract after 14 days of reflection.