How does a credit repurchase work?

HomeBanksHow does a credit repurchase work?

Are you having trouble repaying your loans? Do you have accumulated financial commitments that you have difficulty in honouring?

In either case, the ideal solution would be to opt for a credit buyback.

With this clever maneuver, you can lighten your monthly expenses while keeping your financial situation down. Find out how a credit repurchase works.

The application for a credit repurchase

The application for credit repurchase is the first step of this procedure. It takes place just after the study of the different services offered by the banking organizations. Indeed, it consists in sending a letter of request for credit consolidation. This letter is addressed to the bank or structure whose offers best meet your needs. You can opt for the intermediation of a broker in order to benefit from his expertise in the matter.

In addition to filing the application, the subscriber (in your person) will be asked to provide more details about their overall financial situation. This includes declaring all loans owed to him/her and presenting his/her income.

The study of the demand

On the basis of the information provided by the subscriber, the agent of the concerned structure proceeds to a meticulous study of the file. The objective is to verify the regularity or consistency of expenses and income. The difference between the value of the accumulated loans and the value of the subscriber's overall income makes it possible to evaluate the feasibility of the application and its investment capacity.

The file can then be accepted if the lending institution is satisfied with the rate of return on the procedure. However, if the value of the income is not sufficient to cover the debts, the file may be refused.

Merging of credits

This step consists of grouping all the debts in order to evaluate their value. This will be considered as the only loan to be paid by the subscriber. This step is based on a simulation of each debt. It also requires the production of certain documents. These include:

  • proof of income,
  • account statements,
  • and receipts for previous monthly payments.

A search warrant is also issued to the lending institution. It is up to the latter to engage with the former creditors of the subscriber.

Determining the bundle offer

It consists in defining the mode of regrouping of credits to adopt. The choice of the latter is made by the subscriber who must take into account his expenses and his financial capacity. The deadline and the value of the repayment are also to be considered.

In addition, the choice must be made within 14 days if it is a repurchase of consumer credits. This period is one decade for credits resulting from a mortgage.

Payment of debts

This step closes the credit repurchase procedure. Once the method of consolidation is defined, the lending institution proceeds to repay the other creditors. It is also possible to pay a liquid amount to the subscriber. This depends on the clauses of the loan contract. The advantage of these cash loans is that they allow the consumer to meet current expenses. In addition, it is worth mentioning that the procedure of a credit repurchase lasts on average 10 to 30 days.

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