To finance big purchases like a car or a motorbike, you sometimes have to resort to credits. The accumulation of conventional credits as renewable has negative consequences since the debt ratio is increasing. An excessively high debt ratio reduces purchasing power. Consequence: the indebted home is caught in the throat can no longer properly meet his personal needs. Is there a way out of this infernal spiral?
Manage your monthly budget
When you have trouble finishing the end of the month, it is imperative to look for solutions to increase your income while reducing your expenses. This research starts with the management of its budget. It is necessary to try a maximum to set a monthly budget to respect. One can, for example, restrict a few months their food budget as the budget for recreation. It can also seek savings on its various insurance ( home insurance, insurance for vehicles ). Unfortunately, with a debt ratio close to 33%, these little ideas for savings are not enough.
Turn to financial organizations
Financial organizations are at your side. They propose to accompany you in your project by offering you a financial product ; the redemption of credits.
The redemption of credits: what is it? Credit or banking institutions believe that holding a single credit in one agency allows indebted households to better manage their budgets. In fact, to put this idea into practice, they offer the possibility of collecting all conventional credits ( auto loans, personal loans… ), revolving credits ( revolving credits with store cards ) as well as unpaid and bank overdrafts in a single loan. This is the very principle of redemption of credits.
Some financial organizations specialize in the renegotiation of real estate loans. Others simply suggest consolidating consumer credit. It is therefore necessary to analyze your situation by carrying out a statement of your finances before opting for this financial solution.
What are the advantages of buying back credits?
The redemption of credits has a real positive impact on the budget of an indebted household. It will allow:
- To have a single monthly payment to repay (except the monthly installment of the mortgage) to a single organization. Mechanically, budget management is simplified.
- To have a new loan at a single rate. The rate as well as the duration of the new loan are defined in the loan offer.
- To have a lower monthly payment. The duration of the loan is extended which reduces the amount of the monthly payment.
- To have a debt ratio that decreases.
- To regain purchasing power and to live better.
Using a purchase of its consumer credit also allows to open rights to a new loan to finance another project ( loan for work or to buy a vehicle… ). In this case, the new credit is incorporated in the amount of the redemption of the credits.
Be careful however, it is advisable to no longer use consumer credit after having bought a loan at risk of falling into debt.
Who can be eligible for a buyback?
The agreement to buy back credits will depend essentially on the level of indebtedness of the applicant. To do this, the advisor will determine his solvency from the resources of the home and expenses. It is only after having made calculations that he can refuse the application or open this right. For indicative purposes, the debt ratio must be less than 40% to benefit from a redemption of credits.
Solvency is not the only condition. The financial expert will also analyze the professional situation and the personal situation. In fact, it is easier to get a buy back credit when you are hired and if you are under 60 years old.
Finally, note that households registered in the Banque de France can benefit from this system provided they are filed for incidents of refund of credits.