When rates are at their lowest and our financial situation allows it, it may become interesting, particularly in the context of a mortgage, to renegotiate your loan with your lender . Others, for their part, opt for a loan buyback.
So what is the best solution between these two possibilities? What are the differences between them? Their advantages and disadvantages? We tell you everything.
The difference between a renegotiation and a repurchase of credit
When the conditions allow it and the rates currently in force are lower than those stipulated in your contract, the renegotiation of the loan with your bank is necessary.
However, we must be extremely vigilant and take into account, in the operation, the possible additional costs (administration fees, early repayment indemnities (IRA), insurance …), the objective remains to save money. If you and your bank have agreed on the new repayment conditions (duration, monthly payments), you will continue to repay your loan as before, but at a more advantageous rate for you.
The repurchase or consolidation of credit
The main role of credit consolidation, as its name suggests, remains to pool several debts contracted in advance under a single monthly payment . But, if your bank refuses to renegotiate with you at first, this may also become a possible solution. Indeed, turning to the competition is often more expensive than renegotiating, but if you get a better rate, there is nothing wrong with seeing what others can offer you.
So rather renegotiation or repurchase of credit?
The two solutions are valid and are not to be opposed. Seriously considering a takeover by another institution can be a good lever for negotiating with your bank, and vice versa. In either case, you must prepare for your appointment and carefully calculate the costs and expenses incurred. And to help you with this, do not hesitate to call a professional (also take into account its costs) or to carry out simulations (free) on the Internet yourself.
And because the overall cost of a loan is not fixed only by the addition of monthly payments, it is all the expenses that must be considered in their entirety. The rate is not everything.