In your search for a loan buy-back solution, you are logically attentive to the amount of the monthly payment which you will have to pay after the assembly carried out. The amount of this future monthly payment depends on your current debt ratio, the conditions negotiable with banking organizations, and the rate that will be applied to the repurchase of credits. How to get the best rate possible? What are the characteristics of the files with the lowest rate? Here are our responses.
Conditions to benefit from the best possible rate
To obtain the best possible conditions, there is no secret, you need a good file. What are the specific conditions?
- The lower your debt ratio (share of credits in relation to your income), the lower the deleveraging effort you need. If the debt ratio is less than 50% before the loan consolidation operation, your file is likely to obtain a low overall credit rate;
- When reading your banking transactions over the past few months, no rejection of payment or even delay in honoring certain monthly payments should appear. A bank incident (direct debit refused, check refused, prolonged overdraft), and you will then arouse the curiosity of the credit organizations. These banking incidents are not always avoidable. However, try to limit them, and present a serious dossier at the time of your request;
- If you have never used the buyout of credit in the past, then credit organizations will be sensitive. Households that use it frequently are less well received. Too much recurrent use can also lead to outright refusal;
- Last condition to obtain a low rate, income. The higher they are, the less the risk taken by the bank. Therefore, it will be easier to apply a low rate to finance your file.
All banks have their own conditions for setting rates based on profiles. The more your file appears degraded, that is to say with blocking points or that encourage caution, the more the rate is likely to increase.
Keep in mind that the rate applied to your operation will increase if your budget is out of balance, and that incidents multiply too often. A filing with the BanFrank or a third party holder notification (ATD) procedure, if you do not pay the amount you owe to the taxes, are also elements that will increase the rate applied.
Can anyone offer me any rate for my loan buy-back?
The rates applied to loan consolidation operations are not random. They meet criteria set by the credit agency itself. The rate applied also changes mechanically depending on the repayment duration (the longer the duration and the more the rate increases).
However, the rate cannot go beyond certain limits. From a legal point of view, the usury rate regulates and sizes the rates offered by banks.
The different rates offered by the banks meet the regulations in force (Articles L. 314-6 to L. 314-9 of the Consumer Code and on Article L. 313-5-1 of the Monetary and Financial Code) and of course respect the wear rate.
“The wear thresholds are published in the form of a notice to the JORF at the end of each quarter for the following quarter”, which details the thresholds of the ‘applicable wear. The rate of wear is only a reference, and does not constitute in a precise way the rate which will be applied to you.
Example with a usury threshold applicable from July 1, 2016 of 7.40% for loans of an amount greater than $ 6,000. A good file will be able to claim at a low rate, sometimes close to 2%, while a file judged more risky, and with a strong deleveraging to be applied, will be able to see being applied a rate of 6 to 7%. Usury serves as a ceiling, but the freedom of banks is important.