The repurchase of credits is a financial operation which allows many borrowers to find a more balanced budget while simplifying their management and facilitating new investments. By consolidating all or part of your old loans with a single loan at the most advantageous rate conditions, you will also have the possibility of changing borrower insurance in order to make additional savings. How should we buy back credits? What are the opportunities to seize? For you, Solution Crédits takes stock…
Is it essential to take out borrower insurance?
When you buy back credits, you will replace all or part of your old loans with a single loan on more advantageous terms. This operation allows you to lower your monthly payments, generally by extending the duration of your loan. It also offers you to simplify your management with a single line of credit to be reimbursed each month.
As with any loan, your new consolidation loan commits you. It must therefore be reimbursed. However, you may have to face difficulties during your life, be it an accident, separation, or loss of job. In this case, the borrower insurance will take over and reimburse your loan according to the terms of the guarantees to which you have subscribed.
You do not have to take out insurance for your loan buy-back, but in most cases your lending institution will require it. Particularly if your credit repurchase includes a mortgage (repurchase of mortgage credit). Loan insurance makes it possible to guarantee to the creditor that it will be reimbursed whatever happens.
Should you cancel your old borrower insurance?
The loans that you are going to collect are generally also supported by borrower insurance.
With regard to the first lending institutions, your credit repurchase is equivalent to a prepayment and it terminates your loan contract, as well as the current insurance, if it has been contracted with the bank that gave you credit.
When your loan insurance has been delegated to another insurer, you will need to inform them of your loan buy-back plan. You will then have the possibility of terminating your contract or renegotiating it so that it is adapted to the new conditions of your credit buy-back.
Remember that buying back credits can also be an opportunity to save on your new borrower insurance.
In most cases, the cost of your new insurance will be lower than the sum of the costs of your old insurance, especially if you choose an advantageous insurance delegation instead of taking out the insurance offered by the bank that carries out your repurchase of loans.
Do we have to take out group insurance from the lending institution?
Since the Cogilaw Compaby (2010) and the Mahon Law (2014), you have the freedom to take out insurance other than that offered by the bank which carries out your loan buy-back.
It is in your best interest to take advantage of this advantage. Indeed, the insurance delegation very often allows you to halve your insurance contributions on average.
Play the competition. Credit repurchase brokers, such as Credit Credits, will be of great help to you in comparing loan repurchase insurance offers. With equivalent guarantees, they will allow you to take out the most advantageous loan buy-back insurance so that you can also save on this item.
To remember: last January 12, the constitutional council validated the Bourquin amendment which gives you the possibility of changing insurance once a year. Depending on the evolution of your situation, you can therefore adjust each year the borrower insurance contract which guarantees the repayment of your monthly payments.