The repurchase of revolving credit: how does revolving loan work?
As this is a financial reserve that is renewed at the end of a schedule, the revolving loan also refers to “revolving loan” attracting more and more French. Beneficiaries can indeed have flexible cash flow without having to justify the nature of their expenses.
The revolving credit is however to handle with caution because it often leads to over-indebtedness when the borrower is forced to endure financial burdens increasingly heavy. In effect, the repurchase of revolving credit makes it possible to clean up its current account. More information about this …
Principles and operations of the revolving credit purchase
Like other types of loans, the revolving credit can also be a candidate for the purchase of credits. Once the revolving credit is surrendered, the borrower’s account ceases to be replenished. A new loan will be put in place with a more simplified refund. Indeed, it should be known that the rate of revolving credit is quite high, because it turns around 15% and 20%, which means that over-indebtedness can occur because of the renewal of the loan as explained.
The repurchase of revolving credit makes it possible to benefit from a more attractive interest rate. That is, a revolving loan can be combined with other loans such as a home loan or conventional consumer loan. But the exclusive purchase of revolving credit is also an option.
The conditions necessary to benefit from the revolving credit
In order to benefit from the repurchase of revolving credit, the borrower must present a complete file including his marital status, his proof of income like the last three payslips, his tax notice and his declaration of real estate patrimony (in the case of a mortgage loan). He must also have a repayment capacity greater than 33% in which case his application could be refused. It is also important to know that the applicant must complete a health questionnaire and possibly perform a medical check-up so that the bank can assess the risks related to his physical condition. It should be noted that insurance costs could further increase the cost of revolving credit if the applicant has health problems.
The benefits of the revolving credit redemption
The revolving credit should temporarily replace a cash flow problem, but it should not stay in time. Indeed, beyond six months, the cost of this loan becomes disproportionate. In a survey conducted in January 2018, the Bank of France reports that revolving credit accounts for around 19% of personal indebtedness. The repurchase of revolving credit makes it possible to sweep this financial weight by readjusting the monthly payments to the capacity of indebtedness of the borrower. Indeed, the repurchase of credit is interesting because the financial charges can be reduced by half. Moreover, the repurchase of credit makes it possible to be deduced from the agios too expensive.
Some recommendations before subscribing
In order to make the most of the credit redemption, it is advisable to use a banking intermediary. He will be able to make a relevant analysis of your situation and judge if the credit buyback will help you out of crisis. In addition, this expert can help you in the editing of your file to put the odds on your side.
On this fact, the broker can approach the banks and financial institutions to get the best offer of buy back credit on the most advantageous terms. Also perform several simulations and quotes if you opt for an online credit redemption. Be aware that the borrower has a cooling-off period if he changes his mind after signing the new contract.