The purchase of consumer credit is a financial solution that consists of consolidating its various loans contracted for consumption into a single credit. The repayment period is then re-evaluated (very often increased) thus allowing the total amount of monthly payments to be amortized. Attention, for the regrouping of credits, is of nature of the consumption, the part of the real estate loans redeemed must not exceed 60% of the total share. If you roll over under repayments and you have trouble making ends meet because of monthly payments, this solution may be suitable for you.
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When you request the loan consolidation service, you may redirect to Consolidation Now, which is a specialized institution that covers all your loans contracted with other banks by their early repayment. An advantageous rate is then proposed, in exchange for an increase in the repayment period. Note that this duration is limited to 12 years maximum. In addition, the value of monthly payments varies according to the rate chosen (fixed or variable), the income received, as well as the rate of indebtedness at the time of the request for consolidation.
In addition, there are two options for buying back consumer loans: the tenant buyout and the real estate buyout. The repurchase of tenant loans makes it possible to regroup only consumer credits as well as certain debts. The repurchase of real estate loans, it includes both credits for consumption and real estate loans.
In addition to the decline in monthly payments that allow relative deleveraging, the purchase of consumer credit presents different opportunities. Among them, the rapid implementation of this purchase of credits allows the realization of its projects without increasing its budget. In addition, this makes it possible to anticipate a fall in income and spread its repayments over the medium term in order to avoid over-indebtedness. Finally, if the consolidation of consumer credit does not concern the purchase of a mortgage, the bank does not necessarily require collateral and it is therefore easy to access it.
The major disadvantage of buying back consumer loans is its long-term cost. Indeed, although advantageous in the short and medium-term, because it allows spreading its repayments, it inflates the overall cost of credit in the long term. In addition, certain additional costs must be taken into account when buying consumer loans: the fees of the banking establishment, the possible guarantee offered, the insurance that may be required, etc. Finally, the rates applied to the purchase of Consumer loans are generally higher than those of other loans.
In conclusion, there are various possibilities for buying back consumer loans, which can reduce monthly payments that can sometimes suffocate households. However, the institutions proposing such repurchases intend that the new credit contracted, which results from the regrouping of the old ones, must be repaid until its term. Sanctions, therefore, exist for the early redemption of credits already derived from a previous acquisition. It is, therefore, necessary to analyze the advantages and disadvantages of this solution according to its situation.