Speculation is rife on the web regarding offers to buy credit at low rates but can we really benefit from a credit buy at such a low rate? Here is the answer.
Real estate rates: record levels
Real estate rates have never been so low, enough to wake up the real estate projects of households and reduce the monthly payments of owners already in place. Simply put, it is estimated that a household that lives in the north and wants to borrow over 15 years can obtain a rate of 2.5%. A very attractive proposition for households but only solid profiles will get this offer. That is to say households with long-term and significant incomes, the absence of payment rejections and a low debt ratio.
2.5% home loan buy-back: for whom?
Can we imagine that this 2.5% offer is applicable to credit consolidation? Not so sure but we are getting close. The repurchase of credit in itself consists in lengthening the duration of repayment to reduce the amount of the monthly payments. This therefore implies that the initial loan must be repayable over a period of less than 15 years. Another important point, this operation is generally requested when the debt ratio plays with the limit (between 33% and 50%), so the borrower must have a debt ratio below this area.
In other words, this offer can be considered during a credit consolidation but it will be granted to a household with significant income, a low debt ratio and the absence of payment rejections or bank card. In other words, a household that wishes to simplify the reimbursement of its credits and obtain a single withdrawal.
The repurchase of credit changed with the fall of the rates
There is one notable observation on the credit consolidation market, that of its evolution. In the past, only households approaching over-indebtedness thought of grouping loans to reduce their monthly payments and start off on better financial bases. It was sort of the last chance solution before the over -indebtedness case.
Today, this operation now affects households wishing to reduce the cost of their loans by taking advantage of lower rates. These are opportunistic households. The latter do not necessarily need a grouping of credits but take advantage of this solution to standardize their repayments and add an amount dedicated to new financing. Thus, they leave over a longer period, with an increase in the total cost of credit, but often at a lower rate.
To obtain a feasibility study for a loan buy-back project, this website offers its free, no-obligation simulator.