When you carry out a credit repurchase transaction, that is to say combine several loans that you currently hold into one, you then have only one monthly payment to repay. A single monthly payment simplifies reading your budget. But if you only have one loan left, what happened to the loans you had in the past?
Who was responsible for paying them off? It is the organization which grants you your new loan which has settled with your old lenders the loans which were still running. There are, however, some exceptions to this rule. Here is the detail.
Who pays off your outstanding loans when you buy back credits?
To find out who is responsible for repaying your current credits, you need to look at the “nature of the transaction”. There are indeed two types of grouping of loans. When you only have consumer loans, we talk about buying credits. If one or more existing home loans have to be added to these consumer loans, then one speaks of buying back home loans. This distinction changes the nature of the financial arrangement, and the role of the different parties in the repayment of outstanding loans.
I make a repurchase of mortgage loans
In this case, whether you have one or more home loans, or even consumer loans with a mortgage guarantee in progress (the property serves as a guarantee), then it is the notary who will take care of the repayment of your creditors during loan consolidation.
I buy back credits without a mortgage
If your project does not have a mortgage guarantee, or even a home loan, then it is the financial institution which takes care of restructuring your debts which is responsible for repaying the loans in progress. This financial institution “redeems your credits” in the literal sense, that is to say that it disburses sums from your creditors in order to settle the loans. He then creates a new credit which he grants you.
Calculation of amounts to be reimbursed
The calculation of the sums to be reimbursed for your old credits is carried out simply by determining the amount of the principal remaining due of all your current credits, and by adding to it the possible costs and indemnities for early repayment.
The latter may represent a significant portion, varying from one loan to another depending on the conditions of the original contract. The financial institution that buys back your loans then knows the total amount it has to spend to buy back your debts. It is by carrying out this calculation that he makes you an offer with a new credit rate, a new spreading period for the reimbursement, as well as a new monthly payment amount.
Don’t worry about clearing credits
The repurchase of loans is a complete solution, based on real support from finance professionals. Capital Lender, undertakes to support you in the various stages, by providing you with clear information. Our dedicated teams explain to you how it works and the procedure to follow to carry out a loan consolidation, and answer all your questions. We present you the different offers that we have been able to glean on the market from our partners, and we advise you on the wisest choice according to your profile. Everything is designed to support you and to simplify your procedures.
You do not have to settle the outstanding loans yourself in order to take advantage of a loan buy-back offer. By entrusting your file to an intermediary like Capital Lender, you don’t have to worry about this step. It is the bank or the credit institution whose offer you will accept, after discussion with an advisor, who will be in charge of proceeding directly to the repayment of the credits concerned by the repurchase of your loans. For you, the procedures are made easier!