When a household has subscribed to too many credits, it may be advantageous to move towards a credit buyback operation. In most cases, the lending institutions will require a guarantee to secure the transaction and limit the risks in the event of non-repayment. For homeowners, this guarantee often takes the form of a mortgage. But there are other guarantees to allow individuals to obtain a buy back of loans without mortgage.
The principle of redemption of credits
The purchase of loans an operation for borrowers whose financial situation is destabilized by the payment of too many monthly payments related to the repayment of several loans. By moving towards a repurchase of credits, an individual can thus redeem all or part of the loans held by his or her own bank or other institution. As a result, the initial repayment conditions are renegotiated in the form of a new single credit agreement. This operation will make it possible to obtain a more advantageous rate and thus the fall in the amount of the monthly payments. In return, the repayment term of the loan will be extended. To guarantee the operation against possible defaults, banks and specialized institutions will require a guarantee which may take the form of a mortgage for the owners. We will talk about the purchase of loans without mortgages when the contract is guaranteed by a joint surety, bank guarantee or a payday break.
Open to all major persons residing in France, the redemption of credits is aimed at any borrower presenting a solid file, but whose current budget is destabilized by the multiplication of its deadlines of credits. However, persons registered in the National Register of the Francia Bank are not eligible to buy loans except under certain conditions.
The types of credits involved in this operation
The repurchase of loans without mortgage concerns mainly the regrouping of credits with the consumption. Thus, it is possible to include the following loans:
- revolving loans : this is a loan that makes it possible to obtain an agreed sum in agreement with its banker and to renew its payment as and when the expenses. This is paid without presentation of proof of purchase.
- personal loans for consumption : this credit makes it possible to freely obtain an amount intended to finance a purchase or a project. It can also be used to fill a cash flow need.
It is also possible to include in a grouping of loans : bank overdrafts, tax delays, delays in rent or charges, but also family or private debts.
In order for a home loan to be included in a mortgage-free loan consolidation, the remaining amount of the principal due will be a smaller proportion (less than 60%) of the total amount of the transaction.
Alternatives to the mortgage
Without a mortgage, the majority of banks and credit institutions will require borrowers to provide another guarantee. Indeed, it is essential to insure creditors in case of inability to repay from their client. Depending on his profile and the strength of his file, he will be able to provide another type of bond. So, the alternatives to the mortgage can be:
- The bank guarantee : when requesting credit redemption, a borrower can request the services of a specialized bonding agency or a banker institution. The latter will be guarantor in case of impossibility of repayment from the borrower. This is a costly solution since it will represent on average 2 to 3% of the total amount of the overall repurchase transaction.
- The joint guarantee : to guarantee a redemption of credits, it is possible to ask a relative or a member of his family to make a commitment to the lending institution to repay the repayment dates of the credits, instead of the signatory. For this guarantee to be accepted, the person must be solvent and have a solid banking profile and stable finances.
- Payday termination : As part of a mortgage-free buy-back, some banks may offer as a guarantee a direct deduction from the borrower’s salary. The amount of the monthly repayment will be levied at regular intervals by the company. This type of guarantee is often a good alternative, as it offers great security for creditors. This agreement must be signed and concluded when the loan consolidation agreement is signed.
Choose an organization adapted to your needs
There are many mortgage-free mortgage buy offers on the market. Faced with their multitude, it is not always easy to get a clear idea and choose the best option. Especially since a mortgage-backed mortgage can sometimes be more difficult to obtain depending on the borrower’s profile. This is why it may be wise to use a broker or other intermediary in banking. As a market specialist, the broker usually has a large network of partners and will be able to offer the most suitable formula for his client’s needs. On the other hand, the role of a broker is also to accompany his client in the development of his file in order to maximize his chances of granting and to negotiate the best possible conditions.
There is another option to get an idea and compare offers on the market: make an online simulation on different specialized platforms. For that, it is enough to inform all the information relating to the credits concerned by the future redemption, as well as the personal information of the borrower, to obtain in minutes a estimate.
Finally, to obtain the best offer and ensure the granting of its application, we should not hesitate to play the competition between the various players in this market. Indeed, it is quite possible, even frequent, that a redemption of credits without mortgage is granted in an establishment even if it would have been refused by another.
The importance of the file for this type of operation
After selecting an offer, it is essential to take good care of the file to ensure a favorable response from the chosen institution. Each request for the purchase of mortgage-free loans is carefully analyzed and studied by an internal committee of experts at the institution. The first criterion to fulfill is of course the debt ratio of the borrower, which must not exceed 33%. Creditors are also particularly attentive to the rest of their future client’s life, which is an essential parameter in validating the request for the redemption of credits. This corresponds to what will remain to the borrower once he has paid his monthly payments and fixed charges (rent, electricity, telephone, internet, taxes). Good banking management but also a certain stability and regularity of income will also be required.
To increase the chances of obtaining a loan without mortgage, it will be necessary to build a solid file and presenting a maximum of parts that can attest to the strength of the profile. The more complete the file, the more it will be processed in a short time.