Credit Redemption Guide | Debt consolidation

Our Guide to Credit Redemption is intended to help you understand the redemption of credits and understand all aspects of them. We explain to you the different stages of the loan redemption process, the different types of credit redemption, its benefits and its cost.

What is the purpose of the redemption of credits?

What is the purpose of the redemption of credits?

The redemption of credits allows to group in one line of loan all of its credits, whether they are for real estate or consumption. It can also integrate a bank overdraft, debts or receivables and a cash envelope to carry out a project. The objective is to make a new loan with a single rate, the duration of which will make it possible to obtain a monthly payment adapted to the repayment capacities of the borrower. This loan replaces all old consumer credits and simplifies the borrower’s budget management.

Credit Redemption Guide: Types of Projects Funded

Credit Redemption Guide: Types of Projects Funded

As with any type of consumer credit or real estate credit, the redemption of credits exists in different forms and is possible for different types of projects. The purpose of a loan redemption being to make a new loan, with a clean rate and monthly payments, therefore, this new credit could very well be a simple consumer credit, a mortgage and credit conso ( in order to consolidate the debts at the same time as to finance the purchase of a real estate), a credit to have a cash envelope, etc.

The possible types of projects with a redemption of credits are:

  • Purchase of real estate loans
  • Purchase of consumer credit
  • Purchase of real estate and consumer loans
  • Purchase of credits and request for cash
  • Purchase of credits and consolidation of debts
  • Redemption of credits and loan work

Each of these credit buy-backs therefore have their specificities, as well as their own conditions and criteria. Learn more about the types of credit redemption.

What are the steps of a credit redemption?

What are the steps of a credit redemption?

The redemption of credits follows strict implementation rules. The financial package is more complex than for a simple consumer credit or a mortgage loan. But a redemption of credits is also prepared before the financing plan. Learn more about the steps of a credit redemption.

Credit redemption: for which types of profiles?

Credit redemption: for which types of profiles?

Whether you are on a fixed-term contract, a liberal professional or retired, there are solutions for the purchase of credits. The setting up of the file of the financing and the file of repurchase of credits will be subjected to certain different criteria according to your professional situation. Learn more about the purchase of credits according to the professional situation.

The cost of a credit redemption

The cost of a credit redemption

The cost of buying back credits is subject to different variables and different criteria for granting. These different types of fees may also vary depending on the total amount of the loan (s) to be redeemed and depending on the nature of the new transaction. Learn more about the cost of buying back credits.

The benefits of buying back credits

The benefits of buying back credits

The redemption of credits has several advantages: a single monthly payment, recovered cash, avoid a situation of over-indebtedness, enjoy more attractive rates, etc. So many benefits for the financial well-being of your household. Learn more about the benefits of buying back credits.

What are the documents to provide for a purchase of credits?

What are the documents to provide for a purchase of credits?

As with any financing file, various documents must be collected for a purchase of credits. And all of these supporting documents may be different depending on the type of purchase of credits. In addition, if there are two borrowers when buying credits, it will be necessary to provide the documents for each of them. Learn more about supporting documents for a buy back of credits.

Distinctions of the redemption of credits

Distinctions of the redemption of credits

Depending on the nature of the loans to be consolidated, the redemption of credits can be divided into two broad categories.

  • Consolidation of consumer loans: It is intended for the purchase of consumer loans, revolving loans, debts or receivables, overdrafts and a cash envelope.
  • Consolidation of real estate loans and consumer loans: it is intended for the purchase of one or more real estate loans and may include outstanding consumer, renewable, overdrafts, debts or receivables and a cash envelope.

Depending on the category in which the borrower is located, the loans granted may vary in amount, duration and guarantee.

The most frequently asked questions

The most frequently asked questions

In terms of redemption of credits, many questions may arise, other than on its operation or its cost. The Central Financing Office gives you its answers to the most frequently asked questions about the purchase of loans:

After buying back credits, can I take out new loans?

After buying back credits, can I take out new loans?

It is entirely possible to subscribe or not to new loans, but you must first check your ability to repay and, if necessary, seek the advice of professionals such as La Centrale de Financement.

What is the age limit for a credit surrender?

What is the age limit for a credit surrender?

Credit redemption has no specific age limit and depends on the lending institutions. In general, the repurchase of credit can be carried out until 75 years. In the case of financing senior profiles, the end date of the contract will also be taken into account, around 85 years maximum.

What is the maximum duration for a credit redemption?

What is the maximum duration for a credit redemption?

The maximum duration for the redemption of credits depends on the type of redemption. In the context of a buyback of consumer credit the maximum duration is 12 years. In the case of secured loans, the repurchase may be up to 25 years and 35 years for a mortgage loan repurchase (within the maximum age limit of the end of the loan).

What is the withdrawal period for a credit surrender?

What is the withdrawal period for a credit surrender?

When the borrower receives the loan offers as part of a mortgage repurchase (minimum of 60% real estate credit in the repurchase of credit), it is protected by the Scrivener law. This means that the loan offers must be returned no earlier than 10 days after receipt, to allow time for reflection to the borrower. If the borrower decides to retract he will owe no fees to the institution. In case the lending institution has already made money available to the borrower before the end of the withdrawal period, the borrower will have to repay them within 30 days with the interest due. When the offer to buy credits is accepted, the borrower has a withdrawal period of 10 days for repurchases of real estate loans and 14 days for the purchase of consumer credits.

Property debt background debt

Your own property or your own property offers excellent security for credit institutions. And high collateral goes hand in hand with low risk to the bank, reflected in a favorable interest rate. For the taking up of a loan, the home offers itself as security so officially. So that the security is also recorded in writing, it is necessary to enter the loan as a mortgage on the house. This is done at the land registry, which enters a mortgage. If the property is currently unencumbered and the lending bank is the first to be registered, it will be ranked first. That is, in the case of a case, for example, a foreclosure sale, the first-ranked registrant is preferred and gets the money first. On the other hand, if the auction does not bring enough, it may be empty. If the mortgage is paid off at some point, it will be deleted. The registered mortgage remains however. See http://ayaaaak.net for an illustration

Mortgage has no debt

Mortgage has no debt

However, it does not necessarily have to be a bank in whose favor a mortgage is registered. Even a homeowner can do that by registering a landlord’s lien on his property. Under German property law, the landlord’s lien is therefore a mortgage, which is entered in the land register in the name of the landlord. Since a mortgage has no debt – that is, a mortgage is not a repayable loan – any landlord or landlord can register a landlord’s lien without incurring any monthly costs, as is the case with a mortgage , For the following reason, this makes sense first and foremost with an empty lot:

A landlord’s lien gives the landlord the opportunity to secure a “pole position” for (later) targeted borrowing. As just described, a high rank offers some benefits. For example, the owner may offer his first mortgage to a credit institution, resulting in a loan with more favorable terms than subordinated debt. Especially with a Eigentmer-letter Grundschuld a quick securing means is available. The owner can therefore at any time provide security for a loan by transferring the mortgage deed to the bank. The beneficiary no longer has to be entered in the land register, so that there are no additional costs due to a rewrite.

Repayment of the loan

Repayment of the loan

In order to own a landlord’s own debt, the passage to the land registry office is not necessarily required, because this can also arise by virtue of law. As we have already seen, a mortgage is always associated with registering a mortgage. If, however, the secured claim is extinguished in whole or in part in the case of a mortgage, for example by repayment of the loan ( 1164, 1177 BGB), then the “free parts” of the mortgage are automatically converted into a landlord’s lien. It is available to the owner for further use.

However, this provision only comes into effect if there are no other (equal or subordinate) land charges of third parties apart from the landlord’s land charge that has just arisen on the property. Should this be the case, the owners of the subordinated land charges can claim a statutory cancellation of the landlord’s land charge. This is regulated since 1977 in 1179a BGB. If such a claim is asserted, then the owner must cancel his own landlord’s lien. The purpose of this regulation is to allow equal and subordinate land charges to be called. This claim for indemnification may be excluded by contract; but this requires the entry in the land register.