Having too many credits on your back is an evil that can happen much more regularly than you might think. Another misconception: ending up with too many credits is not necessarily the lot of people with low income or people who cannot manage their money. You should know that in more than ¾ of situations of over-indebtedness, it is an accident of life which comes to destabilize the financial balance of the home and not an unconditional accumulation of credits.
Too many credits: reduce your monthly payments
When you accumulate too many credits compared to a financial situation which has changed unfavorably and you can no longer cope with your monthly payments at the end of the month, you have to combine your credits and debts.
The repurchase of credits consists in gathering all the loans in only one and only new credit whose duration will be lengthened. This operation makes it possible to lower the monthly payment which must be reimbursed every month. By cons, overall there will be more agios to pay. The longer it takes to repay a loan, the more it costs. However, when you have too many loans, this is the only way to rebalance a monthly buget that takes on water. Of course, in the end it costs more, but it is the solution to give yourself some fresh air.
The cost of buying back credits is not negligible, it is all the more important to compare the rates offered by the credit organizations. It is not because we are left with too many credits and that the endings of less are difficult that we must rush on the first offer. From one credit institution to another, there can be thousands of USD in difference.
Our exclusive questionnaire will not only help you find the best loan repurchase rate, but will also prepare you for the second phase to negotiate the loan. Indeed, it is not because we have too many loans that we should not do everything to lower the rate.
Once the file has been pre-accepted, by submitting several files in parallel (we recommend at least two), we can play the competition. In addition, it happens that after having obtained a first agreement in principle, one obtains a refusal during the study of the supporting documents. It therefore seems preferable to file at least two files.
Comparison of loan repurchase
The situation can get overwhelming financially when you have too many loans. However, do not rush. There are two important risks to avoid.
The first, the worst, is the scammers. They focus particularly on the most vulnerable people. They will, for example, make people who are registered who have too much credit believe that they can get a buy-back. But for this, the crooks ask for a first payment. However, when one is registered, it is not possible to obtain a credit. On the other hand, as recalled by law L321-2:
No payment of any kind may be required from an individual before obtaining one or more loans of money.
Never believe the testimonials on blogs that explain how a great person from the end of the world helped them out.
The second important point to be careful about when you have too many credits and you are planning to buy back credit is the rate that you will pay in the end. To be very concrete, let’s take an example.
Redemption of credits 30,600 USD over 120 months:
- Creatis fixed taeg rate: 6.19% monthly payment: $ 340.15 cost of purchasing credits: $ 10,818.01
- Fixed taeg rate Sofinco: 6.59% monthly payment: $ 345.89 cost of buying back loans: $ 11,506.80
We can see that for the same loan, there is a difference of around 1000 $. But these differences can be much larger because the commercial offers of organizations often change. In particular for specialists in the grouping of credits such as Créatis.
The other important point when you have too many credits is to note that it is possible to spread a debt of 30,000 USD over 10 years, which allows to obtain monthly payments around 350 $ / month. However before this redemption, with this level of debt, we generally repay around $ 600 / month. Or a monthly decrease of about 40%.
Too many credits: with or without mortgage
The principle of buying back credits can apply as well when you have too many consumer loans but also if you want to include a mortgage. In this case, we talk about mortgage redemption. It is also possible to integrate several mortgage loans into a loan buy-back.
Too many credits: a solution for each situation
To deal with too many credits by choosing the right solution, there are a few essentials to obtain a credit buy-back:
- Not to be registered (FICP or FCC)
- Maximum debt ratio after redemption = 50%
- At least one person from the household on a permanent contract
- Minimum household income, including aid: $ 1,500
Then you have to know who to turn to when you have too many credits:
- 1 consumer credit only : it is not possible to request a loan repurchase in this situation unless there are other debts to take over or an additional cash requirement.
- 2 or more consumer credits : you have to go through a credit buyout.
- 1 mortgage : It is not a loan buyout that must be requested but a renegotiation of mortgage loan rates. It is possible to request it through our credit comparator by choosing “mortgage”.
- 2 or more mortgage loans : You can go through a buyout if the situation is that you have too many mortgage loans to repay. If it is to renegotiate the rates, you have to go through a “mortgage”.
- 1 mortgage and 1 or more consumer loans : you have to buy back loans.
Too many credits: over-indebtedness
When you find yourself with too much credit and that despite all the attempts to arrange debt, it is not possible to find a situation to balance your budget, it is probably that you reach the situation of indebtedness.
As we explained in the introduction, having too many credits does not only happen to others and it is better to report as quickly as possible to the Banque de France so as not to have to face too much pressure on your own. We detailed it in a dedicated article on how to file an over-indebtedness file.