Published on : 18 March 20204 min reading time
Credit consolidation or debt consolidation loan is a financing solution that allows individuals to consolidate all of their debts into a single loan. This then allows them to allocate more than one monthly payment, with a lower rate and in particular a longer repayment period. In simple terms, it is a solution that makes it possible to deal with an unfavourable financial situation such as the risk of over-indebtedness, the accumulation of many loans, etc. On this, you may be concerned by this problem, the ideal is to proceed to a request for credit repurchase from a lending organization. This article explains the different types of credit consolidation available on the market.
Consumer credit redemption: the first variety
Among the two main varieties of loan bundling is the consumer credit buyback. Among other things, this allows you to combine all your consumer loans and debts into a single loan, without any collateral. So, regardless of your profile and your current situation, you can always apply for a consumer credit buyback with a lending institution of your choice. However, you can in no way benefit from this financing offer once you are registered with the Banque de France.
Having said that, the grouping of consumer credit particularly concerns any type of consumer loan that you have to repay from your various creditors. It can thus group together personal credit, car-motorbike loans, construction loans, revolving loans, etc. Apart from that, this type of loan repurchase makes it possible to finance the repayment of the majority of your debts and unpaid debts that you can no longer pay off. In this regard, you can, for example, subscribe to a consumer credit repurchase to pay off employer credit, tax arrears, rent arrears, amounts owed to private creditors, co-ownership charges, etc.
In any case, regardless of the number of loans bundled, the purchase of consumer credit is repayable over a short or medium term. In a word, it must be made over a period of no more than 12 years.
Mortgage loan repurchase
Mortgage bundling exclusively brings together consumer credit and mortgage bundling. More precisely, it allows you to group all the consumer loans, all the debts and all the real estate loans you have taken out at the same time into a single loan. Contrary to the first variety (consumer credit consolidation), mortgage consolidation requires a certain security, namely the borrower’s real estate. This can be an apartment, a house, a main residence or a second home that you own. In this sense, if the property in question is already mortgaged, the loan consolidation automatically terminates the mortgage, for the simple reason that it will allow the affected loan to be repaid.
As far as the repayment period is concerned, the mortgage repurchase including the loan consolidation can extend up to more than 30 years. The duration depends on your file, your current financial situation and the variety of loans to be repurchased.
Apart from the mortgage repurchase itself, it is also possible to renegotiate the mortgage in question. In this sense, the idea is to ask a lending institution or bank to buy back your mortgage in order to obtain a lower rate and at the same time change the term of the loan.
Buying back a bridging loan: a particular variety
In addition to consumer credit repurchase and mortgage loan consolidation (mortgage repurchase), there is also a third variety of credit repurchase, namely “bridge loan” consolidation. This financial solution is certainly indispensable in a situation where you have taken out a mortgage and, while you have not yet finished paying it back, you are already taking out another loan for a second property. This is the ideal type of credit repurchase when a sale or real estate transaction takes so long to conclude that you can no longer wait to acquire a new apartment, a new home, a new house, etc. In short, a new property.
In any case, before applying for a loan repurchase at a lending organization or your usual bank, it is always advisable to evaluate several types of debt with an online comparator.