Credit redemption is a transaction that allows your bank or other credit institution to consolidate your loans and offer you a new monthly payment that you will be able to honor.
The mechanism of credit redemption
The purchase of loans is a solution to implement to reduce its debt ratio. Because you live in a difficult situation, you have exceeded the threshold of indebtedness. Instead of experiencing payment incidents, it’s time to turn to your bank for a pool of credits.
Group all your credits to settle them in one monthly payment
Your bank will study your different credits to set up a refinancing. The purchase of credits may take the form of a combination of your consumer loans or a mortgage loan consolidation.
The latter brings together your mortgage, including the bridge loan, and your consumer credit. Some loans are not taken into account in a credit redemption: the PTZ, the 1% housing and the loan of honor.
The costs of buying back credits
If the monthly payments are less heavy, they are also longer which implies the calculation of new interests. As a result, the total cost of repurchasing credits is very often higher than the sum of the costs of the old canceled credits. It is therefore necessary to compare the offers issued by different institutions: your bank, another bank, a credit institution…
A credit redemption broker may also put in competition the various possible offers among its partners. Fees may add to the initial redemption or amalgamation transaction such as filing fees, prepayment charges and insurance fees.
Are you eligible to redeem credits?
Consolidation of credits does not apply in some cases. If you are unemployed, note that your benefits are not considered income. If you have already had payment incidents and are registered, the lending institutions may not take the risk.
As is often the case, the most reliable borrowers are in favor: permanent employees, retirees and the liberal professions able to prove their solvency. To verify your eligibility, you can perform a simulation of online credit redemption.