By definition, the repurchase of credit is a financial operation which consists in uniting all the credits in progress to make one. The solutions differ from one establishment to another. It is therefore your responsibility to inquire before committing yourself. When a credit redemption file is accepted, is it necessary to take out insurance ? If you ask this question, this article is for you!
The repurchase of credits in a few words
The repurchase of credit is a loan which must be repaid. The repayment term will be defined in the loan offer. You have the choice of the duration. The latter is variable; it can be concluded for 6 months as it can be concluded over twenty years . It should be known that people having recourse to the repurchase of credit are debt seekers who seek to reduce budgets while finding a suitable purchasing power. However, no one is able to predict the future just as no one is immune from the accident of life . It is in this specific context that borrower insurance can be of great use.
What is the point of insurance?
When a consumer wants to invest in stone, he usually resorts to a mortgage. For the loan agreement, credit or banking companies invite the subscriber to take out so-called borrower insurance . This insurance makes it possible to ensure the rear in the event of unforeseen factors ( dismissal, death, disability, etc. ). It is also a guarantee for lending organizations. Indeed, in the event of a payment problem , the insurance takes over either by postponing the monthly payments or by reimbursing the entire outstanding balance .
For information only, the Hamon law allows the borrower to choose his insurer. Thus, it is possible to find the best borrower insurance for your mortgage at the best price. Choose between security and recklessness; it is only a question of responsibility!
But what is the interest in this insurance when buying back a loan? Here is a question that deserves a transparent answer. The borrower insurance taken out in the context of a repurchase of credit offers you many guarantees :
- It covers job loss.
- It covers accidents of life ( invalidity and death ).
- It covers in the event of temporary incapacity for work .
In fact, insurance is a serious asset since it serves as a relay in case of problems to honor the repayments of a loan, and this even if you have a co-borrower !
Is it compulsory to take out this type of contract?
Currently, there is no law that requires a subscriber to purchase borrower insurance. You are completely free to make your choice. It is, therefore, an optional insurance which is taken out by the responsible underwriters. Loan insurance can really be of great help.
To give you a concrete case, if you were to die, you do not leave the heavy burden to your household to repay your drafts since the insurance will take care of settling your current credit . Losing a loved one is painful enough, just like disability. This is why it is sometimes good to protect your loved ones by taking out borrower insurance.