Also called credit consolidation, credit redemption has a simple definition to understand. You will find below the meaning of these financial terms as well as the credits generally concerned by these groups and we will advise you, if you wish, a company with a very appreciated experience, in this sector, more and more appreciated by the investors. .
Credit buyback: the definition
Carrying out a loan repurchase very clearly means “taking the action of grouping together several loans, which you have contracted, into one”. This action allows you to simplify the management of your budget by reviewing the amount of your monthly payments due as well as their duration. There will therefore no longer be “several withdrawals per month” but only one. And you no longer have several APR rates for different reimbursements, but only one; often much more advantageous.
In short , you group all your credits into one; you renegotiate your APR rate with the repurchase organization and you extend your monthly payments. In the end, you are a winner because your monthly payments decrease and generally allow you to benefit from a little more budget each month.
Why buy back a loan?
To move forward in life, it is often necessary to get into debt. If your professional situation is complicated; It requires you to take, sometimes, several consumer loans.
Or it is your investor profile that leads you to get into debt with banking organizations; which make you accumulate several credits.
In other situations, the fact of buying a new car adapted to your daily life, and a main residence requires you to accumulate two credits. As long as at the same time you have to take out a consumer loan to give yourself a little pleasure (buy a television or any other high-tech equipment); you will end up with 3 different monthly payments: different values and rates.
At this point, grouping together (consumption for the car and consumption for electronic equipment + mortgage loan for your home) would allow you to reduce the amount you have to repay each month. Which would surely free you up some extra cash .
In addition, instead of communicating with several different banking or financial organizations, you would have only one contact: your new credit redemption organization. Ideal in this kind of situation.
So your debt ratio will drop significantly. Offering you the possibility of saving a little more money each month. Or else you leave something to breathe.
Another example, if you are a real estate investor and you have decided to combine several apartment purchases in order to build up “passive” income or long-term savings that will allow you to finance your retirement; then you inevitably end up with 2 debt ratios with an organization (or even with several).
In this situation, the repurchase of mortgage is somewhat different but could be just as interesting as an accumulation (consumption + real estate).
Indeed, in the real estate situation, the credits are not grouped, but bought back, one by one (if you have 2), by the financial organization that you have chosen. This one buys the whole of a mortgage loan (it therefore reimburses the bank that lends you) and offers you a better rate). And he will do the same with your second debt.
Thus your debt ratio decreases and you no longer reimburse the bank but the grouping organization.