Buying real estate, acquiring a car, paying for the education of your children, there is no shortage of major projects in the course of a lifetime. To finance them, you can resort to borrowing, the cumulative amount of which ends up straining your budget. In this case, the grouping of credits is a convenient solution, which has many advantages.
A reduced monthly payment
As its name suggests, the grouping of credits or the repurchase of credits consists in bringing together in a single credit all its dispersed loans.
In this case, you will only have one monthly installment to pay. And, compared to the previous situation, this single monthly payment will be much less heavy, but you will have to pay it longer. The reduction can indeed reach up to 60% of the amount of your current monthly payments.
This operation therefore allows you to increase your purchasing power and reduce your debt. It is therefore easier to control your budget and more open to consider new projects. You can all the more foresee it as this lower debt ratio will allow you to present a more favorable file to the lender.
Read also: Redemption of credit between individuals: the complete guide
Better interest rates
In the current context of falling interest rates, particularly in the real estate sector, it may be advantageous to take advantage of a loan consolidation to benefit from more attractive rates.
However, this operation is of real interest only if the loan is still far from its term and if the new expected rates are significantly lower than those currently imposed on you.
Greater ease of management
Paying only one monthly payment limits your management worries. Instead of adding up, every month, the amounts to be paid for the house, the loan for the car and the various consumer loans, you only have to take into account a single monthly debit.
This new situation gives more clarity and visibility to accounts which, due to the stacking of various loans, had become somewhat opaque. To better know where you stand, it is best to plan a fixed date for your direct debit each month.
In addition, to consolidate your credits, you contact a single bank. You can keep yours or take the opportunity to change your bank. What counts is the presence of a single interlocutor. This new configuration makes things easier and saves you valuable time. Managing your finances will be that much easier.
Fund a new project
Since the consolidation of credit makes it possible to release, each month, an additional sum, it is possible to allocate the amount, in whole or in part, to the financing of a new project.
You can thus plan work in the house, consider the purchase of a new vehicle or even plan a trip. The cash necessary for the accomplishment of your project will be included in the buyback operation.
Before obtaining this new loan, your banker will ensure that your financial situation allows it. In this case, he checks, in particular, that this new loan does not lead to an excessive increase in your debt ratio.
Cheaper borrower insurance
It is more than likely that the various lending organizations from which you have requested loans have asked you, each time, to take out borrower insurance.
Again, the credit consolidation allows you to make significant savings. Indeed, you only have one more loan to repay. And, in this case, you will replace all of your insurance with a single borrower insurance. Your overall contribution will then be significantly lower than the sums due for the insurance of your previous credits.
A time for negotiation
Here you are in front of your banker. It is with him that you will conclude the credit consolidation operation. Now is a good time to negotiate with him the most favorable conditions for you.
This is how you are not obliged to accept the borrower insurance that he offers you. This group insurance is generally quite comprehensive and does not necessarily present the guarantees adapted to your specific situation.
Intended for real estate loans, the insurance delegation system allows you to take out borrower insurance with an organization other than the one granting you the loan. In any case, it is best to compare the offers, so as to find the insurance that suits you best.
The credit consolidation can be an opportunity to negotiate other points of your new contract. This is the case, for example, of the penalties provided for if you make an early repayment or the possible possibility of postponing certain deadlines. By negotiating the clauses of the contract point by point, you adapt it to a family or professional situation which may have changed since the conclusion of your previous contracts.
Read also: Renegotiation or repurchase of credit, what differences?