Faced with difficult month ends, are you thinking about buying a loan? This operation can indeed allow you to restore the situation and get out of your financial worries. To obtain loan consolidation studies and find the best offers, the use of a credit redemption comparator is often advisable. Most online credit agencies – if not all – also offer a simulation tool. This allows you to perform comparisons very simply and very quickly. Creditstair takes stock of these two methods.
Why make a credit redemption?
Also known as a credit consolidation or debt restructuring, the credit buyback involves bringing together several outstanding loans into a single credit. The objective, for the borrower, is to lighten his monthly payments. The latter thus gains in purchasing power and has the opportunity, for example, to save or finance other projects that are important to him. As with any credit, borrower insurance is optional here.
A credit consolidation is appropriate in two cases:
- when the borrower begins to experience financial difficulties: it will avoid a potential situation of over-indebtedness and, in fact, a registration in the FICP (personal loan repayment incidents file). Because it is necessary to know it, any over-indebted person registered on this file can not any more not contract a loan nor make a repurchase of credit;
- when the economic situation allows it: in other words, when there is a fall in interest rates.
If a repurchase of credit allows the borrower to lower the amount repaid each month for his debt, it implies on the other hand an increase in the total cost of credit. This for one simple reason: the repayment term of the loan is lengthened. However, this duration determines the APR (annual percentage rate of charge) to be applied. The longer it is, the higher the APR will be.
Good to know: some borrowers act in reverse
The repayment period is set according to the financial situation of the borrower. Thus, when they realize a credit consolidation, some borrowers have the opportunity to shorten the repayment term, and thus significantly reduce their borrowing rate.
I have loans of a different nature: how is the redemption of credit done in such a case?
There are several types of credit consolidation, each adapted to a particular situation.
- The purchase of consumer credit: it concerns all types of consumer credit (earmarked or unrestricted), such as auto credit, revolving credit, bank overdraft or tax debts.
- The repurchase of mortgage: it applies exclusively to real estate loans.
- The mixed loan buyout: it includes real estate credit and consumer credit (s).
Whether you use a credit institution, a bank or a credit repurchase comparator, your credit consolidation file will be treated the same way on this point.
Note: beware of confusion
Redeeming real estate loans and renegotiating mortgage loans are two different concepts that should not be confused. The first means a redemption of your debts by a competing institution, the second a renegotiation with the organization that granted you the loan.
What is a credit redemption comparator?
A credit consolidation can be done at different institutions. The borrower can appeal:
- to a banking organization;
- an organization specialized in credit;
- but also to a broker in repurchase of credit.
Gold, credit redemption comparator and broker form one and the same entity. Intermediary in banking operations (IOB), this professional is independent of banks and credit institutions. Its role is to study your credit consolidation file and then compete for you specialized organizations in this financial transaction.
The credit buyback broker has a whole professional network around him. This allows him to find particularly attractive rates. Much more than if you were applying for yourself.
A broker can be:
- exclusive agent: he depends on a single bank, which he represents;
- or non-exclusive agent: in this case, he holds mandates from different organizations. A wider choice of products will be offered.
Between simulation and online credit redemption comparator, what to choose?
As we have seen, using a credit redemption comparator is an interesting option for the borrower wishing to reduce his monthly payments. It should be kept in mind, however, that a broker, even a non-exclusive agent, will not do a comprehensive market study as it represents only certain organizations.
Even with the best-performing simulators, you will not be able to tackle this task either, given the abundance of credit redemption offers. However, performing a simulation with some organizations will give you a first idea of the rates charged. That does not bind you to anything. It’s up to you to call on a broker, while keeping the offers you have been offered under your elbow. You will have something to compare! To do this, always refer to the TAEG. This includes all fees (fees, insurance premium, etc.) and refers to the total cost of the loan.
How much does a broker buy back credit?
A broker can be compensated in two ways:
- either on commission: oscillating between 1 and 5% of the sum borrowed, it is paid by the institution buying back the credit. You have nothing to pay;
- either in the form of a flat fee: these are therefore at your expense.
This remuneration only occurs once the credit consolidation agreement has been concluded between his client and the credit agency or the mandated bank. Before signing, take the time to read all the clauses. Also make sure there are no exorbitant fees. This is sometimes what can hide the lack of fees.
Credit Cluster: Creditstair Commitments
Creditstair is not a traditional credit institution. We propose an innovative financing model. Unlike the banks or even the various organizations that may be offered by a credit redemption comparator, the capital granted to borrowers via our platform comes from an investment fund. This money is collected from professional investors, such as foundations, insurers or individuals. At home, there is no complex and risky transformation operation. Thus, investors as borrowers find their account.
Many other criteria differentiate Creditstair from most other credit agencies:
- A single loan for all: we only offer loans with fixed and amortisable rates, with free early repayment whatever the amount. At home, there is no floating rate credit or revolving credit, which weakens borrowers’ cash flow.
- Total transparency: we do not conceal any costs. Our credits include a service charge (for the platform’s remuneration) and interest calculated from the APR (for the investors’ remuneration). No more no less.
- Availability and support: we are reachable by phone, e-mail or chat. The borrower also has the opportunity to follow the progress of his credit consolidation file from the dedicated area.
- Reactivity: 24 hours is the maximum time during which you wait for a definitive answer from us (after receipt of the signed credit agreement and all the proof). In case of refusal, you are alerted immediately.
- 100% digital interface: you can send us your documents directly online. This saves you valuable time and facilitates exchanges.
When a borrower struggles to repay his various loans, he is in a difficult financial situation. The credit consolidation is a real way out. Nevertheless, do not act in haste, but take the time to compare offers. Whether this is done through a credit redemption comparator and / or via a simulation tool, it is the insurance to start on a good basis. To discover the rates offered by Creditstair, visit our simulator. It’s easy to use, fast and completely anonymous!