Understand what a credit consolidation transaction is
The credit consolidation is a restructuring operation of several credits. A smoothing of all the remaining amounts to be owed to make only one credit with a monthly payment adapted to the repayment capacity of the subscriber (s).
Credit consolidation is recommended when you have not been vigilant enough on the number of credits to be repaid in the month. So, it is not very good to commit to new credit knowing that 50% of your financial budget represents the amount of consumer loan installments being amortized.
Therefore, it is advisable to group together consumer (and real estate) credits. The loan buyback operation allows consolidation of credits accompanied by a repayment plan adapted to your budget. The loan grouping organization has the obligation according to the consumer code to send you a pre-contractual sheet. The pre-contractual sheet informs the consumer in detail about the characteristics of the proposed credit repurchase plan.
Prepayment of the outstanding principal of your loan consolidation, how does it work?
Credit consolidation: early repayment
You can proceed with the balance of the outstanding principal of your loan, thus, repaying a loan repurchase in advance is something quite possible and achievable. It is a right valid for any person liable for a debt.
So, it is possible to make a partial or total early repayment of the capital remaining due from a consolidation of credits . Repayment is made according to the specific and general conditions of the prior credit offer in compliance with the Consumer and Real Estate Credit Law in force. Depending on the nature of said financing, ie consumer or mortgage, the conditions are different.
Because you should know that closing a loan before its end of amortization date determined when signing the contract, results in early repayment indemnities (IRA). Not receiving the full amount of interest in the loan consolidation contract, the bank issuing the offer has the right to demand compensation from the borrower.
Rest assured, the treatment of the operation is completely framed by law.
Early repayment of a mortgage repurchase
The consumer code provides for a penalty equal to the value of one semester of interest and this within the limit of 3% of the outstanding capital, according to article L three hundred and twelve twenty-one of the consumer code .
However, it has already happened during the instruction of the mortgage repurchase file , to become aware of an early repayment certificate mentioning compensation greater than three percent. How is this possible?
The nature of the loan to be bought back is a mortgage restructuring operation, the question about the loan consolidation and its IRAs is complex, what is certain is that the offer does indeed stipulate in the clause reserved for repayment by anticipation that the indemnity is calculated based on the outstanding capital and the remaining repayment period to run.
Therefore, if the contract is signed by both parties and accepted, the clause applies contractually. In other words, it is a ratio between the amount still owed by the debtor (s) and the end of credit period. The more recent the credit, the higher the IRAs will be, this is a guarantee for the creditor to ensure maximum profitability on the banking product marketed.
Early repayment buyback of consumer credit
In the case of an early repayment of a consumer credit buyback (personal loan), the lending institution can claim to claim compensation that cannot exceed 1% of the outstanding capital to the extent that the amount owed is greater than € 10K.
The indemnity is capped at 0.5% if the remaining amortization period is less than one year. No other compensation can be demanded by the lending institution. Although before the entry into force of the Lagarde Law in May 2011, the rate of this compensation was increased to 5% of the money still to be paid.
Is it possible to negotiate prepayment indemnities?
Yes it is quite possible, everything is negotiable on a daily basis! Trading is a profession that requires extensive knowledge of financial products.
Our status as a credit repurchase broker gives us access to all of the bank's pooled credit offerings on the market thanks to the many partnerships forged with the largest banks specializing in loan repurchases .
As an intermediary in banking operations and payment services (IOBSP), we renegotiate for our customers the most advantageous credit offer of the moment and with the best financing conditions!