There are many ways to redeem your credit. To make the right choice, you must first make an inventory of all your debts that will be subject to redemption. If the option of a renegotiation is interesting especially for a mortgage, the purchase of consumer credit and revolving credit is a good opportunity to reduce the monthly repayments.
Credits opened for redemption
Before looking for the most appropriate way to redeem your credits, you will need to summarize all of your outstanding credits and debts and make a credit redemption simulation. It all depends on the type of credit, but the easiest thing is to know them well.
a) Consumer credits
“Consumer credit” is a generic term that includes many types of personal projects. These credits are offered by many banking organizations, or directly by banks for individuals wishing to finance a major purchase. A cash requirement is the most common reason for applying for consumer credit. But this type of credit also includes loans for the purchase of an automobile, credits for the financing of work in his apartment, the organization of his wedding or to cover the expenses of a trip.
b) Real estate loans
A mortgage is a loan allocated solely to the construction or purchase of real estate. Highly regulated by law, the mortgage is still open to a buy back credit. But specific rules are attached to it, which can make the redemption of a home loan more complicated than it appears. Article L312-21 of the Consumer Code states in particular that in the event of a partial surrender of the credit, the refund must be at least greater than 10% of the total amount.
c) Revolving credits
The revolving credit is a permanently available pool of money, which is often accessed directly through a credit card. This type of credit is often offered by major retailers through a loyalty card. Credit agencies also offer this type of money-saving loan, but the customer may be deceived in its use. Indeed, the rates charged by a revolving credit are higher than for a personal loan, which implies a higher cost for this type of credit. It is therefore particularly beneficial to take advantage of a revolving loan buyback to lower the monthly payments and the total cost of credit.
d) Other debts
Other debts can also be redeemed, which can save you very late penalties. This includes late payments of taxes, or unpaid bills such as electricity, telephone, or water. In this case, a redemption of credit is justified mainly to extinguish debts and continue to be enlightened and to have access to drinking water. It is also possible to include in the credit redemption, family debts, that is to say debts that have been contracted from relatives and you want to repay. By redeeming all your other debts, you can be more confident about your finances by not having to pay late interest to your creditors.
How to buy a credit?
As with traditional credit, there are many ways to redeem credits. It will depend on the amount you need to redeem, the type of credit, and how much time you want to spend on research.
a) Online credit redemption
Redeeming credit through an internet platform is both faster and more accurate. Indeed, by directly indicating all the necessary information, these are quickly transmitted to the body responsible for the redemption, and it can send you a quick response. In addition, an online credit redemption request is more suited to your needs as long as you have control over your application. If your application does not include real estate credit, the online organization will offer you a personal credit. It will offer you through this credit redemption, the ability to pay each month a single monthly payment. In your budget, you can also ask that an additional amount of money be added to your purchase to fund a new personal project.
b) With a broker
There are many brokers who practice their profession in connection with the repurchase of credit. Their daily mission is to analyze your file, present it to several organizations and help you make the right choice. Choosing a broker can be interesting in that you do not have a lot of time to spend looking for a credit redemption organization. Indeed, the broker deals with all the steps related to the purchase of your credits, whether from credit institutions, banks or companies to whom you owe money. But all service at a price, and the choice to ask a broker to take care of its purchase of credit, is also agree to pay for services that can be expensive.
c) Renegotiation with the bank
It is also possible to renegotiate directly with the bank with which you have subscribed your credit. However, be cautious about the renegotiation conditions that may be worse due to the payment of fees related to the new contract. Be aware that these fees must legally be included in the new renegotiated credit. So you do not have to advance money at the time of signing the new credit. The renegotiation of a mortgage can be very interesting because of the fall in rates of this type of credit in recent years. Industry professionals agree that renegotiating a credit beyond 7 years is no longer attractive, and it will be financially more profitable to go through a credit redemption. Also be cautious about the attached conditions, for example some bankers may require you to open a new account, such as a housing savings plan (PEL). Negotiation can go beyond credit, so do not hesitate to ask yourself the conditions for renegotiation.
d) New credit, with new project
Doing a credit buy-back can also be an opportunity to find the financing needed for a new project. Indeed, depending on the amount borrowing and the duration, it may be more interesting for you to combine your old credits and your new application to ultimately save your money. A credit redemption is also an opportunity to finance a new expensive project. Whether for a car loan, for cash, for a trip or for work in your apartment, you will enjoy a single credit and a single monthly repayment. This makes it easier for you to manage your finances and your monthly budget.
e) Make a comparison
The easiest way to make the right choice to buy back your credits, is still to make a comparison between the various offers available. Each credit surrender is unique because it is your project and your application that will point you to one way to buy back your credit over another. To compare the different ways, look at the main elements of the new offer: the interest rate, the duration of the new loan, the amount of monthly payments. But also pay attention to the ancillary items, including the clauses that accompany your new credit. When it comes to trading, whether with your current creditor, a broker, or a new credit agency, consider also looking at the cost of the transaction. A broker can take most of the steps, but you will have to pay a commission for his services. If you prefer to save money on your credit redemption transaction, you can prepay your debts.
Doing a redemption operation is probably the best way to reduce your monthly budget by reducing the amount of monthly payments. By releasing your monthly budget, you can regain your purchasing power, for example to finance a new project that is important to you. There are several ways to do this, some are simpler, like going through a broker, but they are also much more expensive. The solution of a credit redemption through an online application remains the simplest and most economical.
If you want more information about the credit redemption you can check our record on the different ways to get a buy back credit. You can also read our tips to make sure your credit buyback is profitable.