The term buy-back has often come up for a few decades now. What does it consist of? Can we take advantage of it if we get into it in 2019? We tell you everything.
The repurchase of credit is not other than one financial operation which consists in balancing your credits in progress in order to subscribe a new one, under more flexible conditions. It can be a consumer credit, a mortgage or other.
Reminder on the concept of credit repurchase
The principle is simple: you ask a credit organization to buy back the current loan and offer you a new loan, with lower monthly payments and a longer repayment period.
The repurchase of credit can also report to many credits at the same time: you balance all your credits in progress to make only one of it, in order to have to assume only one monthly payment per month.
What are the advantages of buying back credit?
For the borrower, the advantages of buying back credit are many.
First of all, it should be remembered that this operation allows him to consolidate all of his credits into one. He will only have to consider one rate, one monthly payment every month. In terms of financial organization, this allows more visibility as to available cash.
Then, it should not be forgotten that the repurchase of credit lengthens the duration of repayment. The monthly payment is therefore reduced, which has a positive impact on purchasing power. In the process, the debt ratio was also revised downwards.
Does it make sense to carry out such an operation in 2019?
If there is one rule to follow when considering buying back credit, it is to look at market rates. Indeed, it is more than recommended to have your credit redeemed when rates are low, as this will allow you to lower the final cost of refinancing.
So what about in 2019? Does it make sense to embark on a loan buyout? What we can say is that the sharp drop in rates in 2016 is far away. These have increased slightly but have stabilized over the past year.
So, we can say that 2019 is still a good year to start a credit buyback procedure, because the rates are still at a widely acceptable level.
However, it is important to read the conditions of the buyback before signing. Sometimes there are certain clauses that make the transaction expensive. For example, this is the case with various penalties, in particular in the event of early repayment.