Obtaining a repurchase of credit can make it possible to readjust the repayment period, choosing a short term makes it possible to limit the amount of interest and to quickly pay off its debt.
5-year credit purchase: operation
Loan repurchase is the process of requesting the repurchase of outstanding loans from a financial institution, which may be a bank, a credit institution or a lending institution. The idea of redemption is to start on a new basis, with a credit amount showing the amounts due, a fixed rate and a new repayment term. The monthly payment can be reduced or increased depending on the choice of the repayment period.
You can buy back different credits at the same time, first of all the repurchase of real estate credit which is well known to take advantage of low rates and savings on interest. This is valid during the first years of repayment, which essentially consist of interest on the loan. It can also be proposed for a purchase of several consumer loans and choose a period of 60 months, the choice will be mainly based on the repayment capacity of the borrower.
The choice of the duration for the repurchase of credit over 60 months
Choosing a new repayment term after a credit surrender is done according to several criteria. First of all, there is the will of the borrower, that is to say that the person requesting the redemption of his credits can specify a desired repayment term. Some households prefer to keep a duration unchanged, but change the monthly payment, others will prefer to reduce the monthly payment by extending the duration, or vice versa.
The loan redemption period will also be determined based on the repayment capacity of the borrower because the redemption will involve a prepayment fee, which must be included in the total amount of the new contract, which will also include amounts due old credits. It is therefore possible, depending on the rate, that the amount is larger, which implies extending the duration. Loan repurchase companies will generally offer several credit surrender periods, namely 5 years, 7 years, 10 years or more.
Simulate a credit redemption, obtain estimates
Loan buy-back is an important step because it firstly provides a quick and free estimate of loan conditions that can be granted, including the feasibility of financing. Then, this same simulation can inform the borrower about the terms of repayment, with the duration, the rate and the monthly payment.
The interest of simulating this operation is naturally to be able to compare the proposals of the various financial institutions, which makes it possible to orient its file towards the most interesting bank. After the validation of the simulation, it is necessary to provide a list of justifications to instruct the file which will make it possible to buy back credits in progress.