Loan buyback is an option available to all borrowers. whether they are real estate or cash, the loans taken out, of different durations, must be studied in order to reduce the amount they still have to repay. Redeeming your loan helps debtors in 5 different ways. An assessment at akumalvilla.net
The purchase of credit to increase its purchasing power
The loan is contracted because a person does not have the necessary money for his real estate purchase. Also because she prefers to keep her cash for something else. Over time, the borrower accumulates his regular cash flow or thanks to an exceptional arrival (inheritance, winning games, big premium, selling his business, …). Thus our borrower can have the necessary cash to pay all the amount of the principal due.
The borrower may consider increasing his monthly purchasing power. This will be possible by removing its loan through a total buyout. Then the solution will double effect: remove credit at high rate, but also adjust the monthly according to its income. Subscribed to a lower interest rate the new loan will be more advantageous !. A nice economy without cutting corners in the budget, which is appreciable. However, he will have to pay the fees for early repayment of the credit. Our advice is to negotiate the free operation of this operation, before anything new. Indeed, negotiation, giving giving, depending on the credit file, can be accompanied by home insurance. This trick, negotiating before subscribing to one’s loan is rather reasonable. In this way, the redemption of the credit will be free!
Takeover of credit and have a new loan at the best rate
Interest rates on loans on the market are constantly changing. Financial analysts note that for several years, interest rates on loans have never been lower than they are now. This trend has been on the decline since 2013. The APR has fallen to more than 3 points in 3 years.
For a 10-year credit contracted since 2012, the purchase of credit can save thousands. So, if there is still a lot of time for the refund. In addition, if the rate difference is greater than 1 point, then the gain for the borrower will be larger. The advantage of such an approach is to offer the debtor the possibility of reducing the total amount of the sum he has to pay. Finally, it will be an opportunity to put back the repayment capacity and the possibility for another bank to hold a debt.
Takeover of credit and have a lower monthly payment
Events such as the birth of a child, the payment of alimony or the subscription to services can increase an individual’s expenses. And because fixed costs such as tuition, pensions and annuities can not be reduced, the last option is loan renegotiation.
This solution makes it possible initially to reduce the amount of the monthly payment and to lengthen the duration. For example, the interest rate on the market is as low as it is currently, the borrower can get a cheaper loan (click here for more information). Thus, not only will the monthly payment decrease, but the cost will also be paid. Moreover, the redemption organizations even propose to personalize the monthly payments according to the repayment capacity of the borrowers. It is therefore feasible to reduce it to the minimum possible and therefore to have lower monthly payments
To have a new loan with a shorter duration
For debt-dependent borrowers, banks and financial institutions often offer loan buybacks for relatively short periods of time. Lenders are more reassured about their capital and can even predict in this case the best interest rates. Indeed, the bank will take less financial risk. Therefore, Bank and Borrowers will agree by mutual agreement, the repurchase of real estate credit in place. With the loan buyback, the borrower, meanwhile, can shorten the repayment period in order to get rid of his debt as soon as possible. Unfortunately, the borrower can not change the terms of his loan contract by his own will. If the bank refuses its request, it can turn to another credit institution. He will proceed to the redemption of his loan by anticipation (before term) the remaining capital. The borrower will therefore become the debtor of this lending institution. In return, he obtains credit conditions favorable to him, including the reduced credit period.
To stop paying several monthly installments every month
It is common for a borrower to contract several loans at the same time: revolving credit, car loan, consumer credit, etc. This increases the debts considerably. Let us not forget that each of these loans has its own terms (duration, rate, amount of the monthly payment, etc.). As a result, differentiated management makes it difficult to manage the budget in general and repayment management in particular.
Loan consolidation is a variant of loan redemption which consists of raising all outstanding capital from these loans as a single credit. The establishment of single credit is refundable with a moderate monthly payment and with a single deadline. It will not only be able to have a substantial decrease in payments at the end of the month by having a single rate and monthly payments more spread out in time, but on top of that it will have only one interlocutor.
To go further, we advise you to read our article explaining the right moment to renegotiate a mortgage.