The purchase of credit is a possible solution to optimize its budget and avoid entering the labyrinth of over-indebtedness. The various credit buy-back solutions offered by financial institutions are governed by laws and the Consumer Code. What does the code of consumption say about amounts and durations?
The different types of credit redemption
Before talking about the possible amounts, it should be remembered that there are three major categories of credit redemption. Let’s make a brief point on the subject.
- The purchase of consumer credit: this is the consolidation of conventional credit ( loan for work, personal loan, car loan… ) with revolving credits ( revolving credits offered by stores…). It is possible to include cash to cover unpaid or bank overdraft. It is not necessary to provide a guarantee.
- The repurchase of real estate loans: it is the resumption of the mortgages with a view to making a restructuring for a lower repayment. 0% loans are not included in this scheme nor 1% loans as well as honor loans for students. You usually have to mortgage a property or have a deposit.
- The purchase of real estate loans with consumer credit (repurchase of mortgage credit): it is a complete renegotiation of all current credits with bond or mortgage. Low interest rate loans are excluded.
Article R313-12 of the Consumer Code reminds us that we talk about repurchasing credits if we group together at least two credits in progress. If the household has only one credit, it can not opt for this financial solution.
Solutions of redemption of credits
What does the code of consumption sayThe code of the consumption frames the solutions of redemption of credits. It goes without saying that the authorized amount will differ depending on the type of credit redemption, but also on the credit or banking organization. Here are the main lines to remember:
- 1. The purchase of consumer credits: The duration can not exceed 12 years and the maximum amount is 75,000 $. The minimum amount depends on the credit institution (or bank). It is possible to find solutions from $ 1,000 and to finance more than $ 75,000 conditional on a low rate of indebtedness.
- The repurchase of mortgages: The maximum duration is limited to 35 years. The amount varies from one organization to another. It can range from $ 40,000 to $ 2,000,000 (2,000,000 at Eicredit, 1,500,000 at Bankate for example).
- The purchase of real estate loans with consumer loans: The maximum duration of mortgage repurchases is 35 years. There is no maximum amount for this category of credit surrender. The finance expert simply has to make a contribution between the total amount of mortgages and the total amount of consumer credit. The percentage obtained will make it possible to know whether to apply the consumer credit scheme or the mortgage loan regime (rate higher than 60% compared to consumer credit).
The main criterion for defining the amount and duration of a loan redemption remains, however, the applicant’s debt ratio. There is no law as to the rate applied. You have to simulate and compare for the operation to be the most profitable.