How does a credit repurchase work?

HomeBanksHow does a credit repurchase work?

Do you have difficulties in repaying your loans? Have you accumulated financial commitments that you have difficulty honouring?

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

With this clever manoeuvre, you can reduce your monthly expenses while keeping your financial situation in order. Find out how a credit repurchase works.

The application for a credit repurchase

The application for a credit repurchase is the first step in this procedure. It comes just after the study of the various services offered by the banking organisations. It consists of sending a letter requesting a credit consolidation. This 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 or her expertise in this area.

Apart from the application, the applicant (in your person) will be asked to give more details of their overall financial situation. This includes declaring all loans payable by the applicant and presenting his or her income.

Studying the demand

On the basis of the information provided by the subscriber, the staff member of the structure concerned carries out a detailed study of the file. The aim is to verify the regularity or consistency of expenditure and income. The difference between the value of the accumulated loans and the value of the subscriber's overall income makes it possible to assess the feasibility of the application and its investment capacity.

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The application may 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 merging of debts, the application may be refused.

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Merging credits

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

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

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

Determining the bundling offer

It consists of defining the method of credit consolidation to be adopted. The choice of the latter is made by the subscriber who must take into account his or her expenses and financial capacity. The repayment period and value of the repayment must also be considered.

Furthermore, the choice must be made within 14 days if it concerns a purchase of consumer credit. This period is one decade in the case of credits arising from a mortgage.

Payment of debts

This stage closes the credit repurchase procedure. Once the method of consolidation has been 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 terms of the loan agreement. The advantage of these cash loans is that they allow the consumer to meet current expenses. In addition, it should be mentioned that the procedure for a credit repurchase takes an average of 10 to 30 days.

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