The repurchase of credits is a possible solution to optimize its budget and avoid entering the labyrinth of over-indebtedness. The various loan repurchase solutions offered by financial organizations are governed by laws as well as by the Consumer Code. What does the Consumer Code say about amounts and durations?
The different types of loan redemption
Before talking about the possible amounts, it should be remembered that there are three main categories of credit redemption . Let’s make a brief point on the subject.
- The repurchase of consumer loans : this is the consolidation of conventional loans ( loan for work, personal loan, car loan, etc. ) with revolving loans ( revolving loans offered by stores, etc.) . It is possible to include cash to cover bad debts or a bank overdraft . It is not necessary to provide a guarantee.
- The repurchase of real estate loans : it is the resumption of real estate loans with a view to restructuring them for a lower repayment. 0% loans are not included in this scheme, nor are 1% loans and honorary loans for students. You usually have to mortgage real estate or have a deposit .
- The repurchase of mortgages with consumer credits (repurchase of mortgage credit): it is a complete renegotiation of all the credits in progress with surety or mortgage. Low interest loans are excluded.
Article R313-12 of the Consumer Code recalls that we speak of credit redemption only if we combine at least two current credits . If the household has only one credit, it cannot opt for this financial solution.
What does the consumer code say?
The consumer code governs loan redemption solutions. It goes without saying that the authorized amount will differ depending on the type of loan repurchase, but also on the credit or banking organization. Here are the main lines to remember:
- 1. The repurchase of consumer loans : The duration can not exceed 12 years and the maximum amount is $ 75,000. The minimum amount depends on the credit organization (or bank). It is possible to find solutions from $ 1,000 and finance more than $ 75,000 under condition of a low debt ratio.
- The repurchase of real estate loans : The maximum duration is limited to 35 years . The amount varies from one organization to another. It can range from $ 40,000 to $ 2,000,000 (2,000,000 at Creatis, 1,500,000 at ING Direct for example).
- The repurchase of mortgage loans with consumer loans : The maximum duration of mortgage repurchases is 35 years . There is no maximum amount for this category of loan redemption. The financial expert simply has to make a report between the total amount of mortgage loans and the total amount of consumer loans . The percentage obtained will make it possible to know whether to apply the consumer credit system or the mortgage system (rate greater than 60% compared to consumer credits).
The main criterion to define the amount and the duration of a repurchase of credits remains, all the same, the debt ratio of the applicant. There is no law as to the rate applied. You have to simulate and compare for the operation to be the most profitable.