The grouping of several credits into one reduces the amount of the different monthly payments. An attractive transaction offering more short-term purchasing power and a lower debt ratio. It is a response to overindebtedness.
However, this redemption represents a cost that must know how to evaluate, to determine if the operation is winning.
What is a "pool of credits"?
As its name indicates, the grouping of credits consists in gathering several loans in one. Also referred to as "Credit Redemption", "Credit Restructuring" or "Credit Refinancing", this " Credit Transaction is for the repayment of at least two previous receivables, including one outstanding credit", as specified by Article R314-19 of the Consumer Code.
It follows that the credit consolidation can take the form of either a mortgage loan or a consumer credit.
Indeed, it is possible to buy consumer loans (vehicle loan, work, etc.) or mortgages. But it is also possible to carry out a regrouping of credits of different nature. In this case, the new regulation (Lagarde law) provides that if the share of mortgage (s) real estate (s) does not exceed 60% of the new loan, the latter falls under the provisions of consumer credit. Beyond this percentage, it must apply those of real estate loans.
What are the purposes of a credit consolidation?
Before the Lagarde law, the ads around the redemption of credits boasted a decrease in monthly payments up to 60%! Since then, it is forbidden to "imply that the loan improves the borrower's financial situation or budget, leads to an increase in resources, constitutes a substitute for savings" without indicating that this necessarily implies a financial counterpart.
Not all loans can benefit from a credit consolidation. This is the case for regulated loans, Zero PTZ loans, 1% housing or student loans.
The main interest of the redemption of credits is to allow the decrease of the monthly payments and of fact, of the rate of indebtedness . Indeed, the capacity of the borrower could be crossed by an accumulation of credits or following an accident of life generating a loss of resources and difficulties to repay.
Secondly, this operation offers borrowers more monthly purchasing power, a margin of maneuver intended to cover exceptional expenses, lay the foundations for a new project or benefit from so-called "comfort" cash.
In any case, the concept of the total cost of credit before and after the credit consolidation operation is crucial.
Who to contact for the assembly of the file?
Better to be accompanied by a professional, to determine all the ins and outs of such an operation. The use of a broker specializing in repurchase credit is essential in that it will quickly appreciate the feasibility of a file with or without guarantee.