The duration of a loan buy-back is not necessarily the same for everyone. It depends on several parameters, such as the nature of the loan grouping (consumer or real estate) or the age of the borrower. At most, how long can a borrower go to repay his loan repurchase? Response elements!
The concept of credit repurchase explained
The repurchase or grouping of credits is a very widespread financing solution in the country. The principle is simple: the bank consolidates several loans in progress, while extending the duration of repayment. The borrower then has only one monthly payment to pay, against several monthly payments previously. Suddenly, there is only one rate applied. As the repayment tenure is extended, the borrower has a smaller amount to pay each month to repay the loan. He can then rebalance his budget, or even consider a new project.
A consolidation of loans does not necessarily lead to an increase in the total cost of credit. It all depends on the rate applied by the bank and the chosen duration.
What is the maximum duration for a consumer credit buyout?
We talk about buying consumer credit when the bank consolidates consumer loans (personal loan, revolving credit, bank overdraft, etc.).
Good to know: other debts can be included in a buyout
This is for example the case of family debts, co-ownership charges, unpaid invoices (gas, electricity, Internet …) or even tax arrears.
If some banks can go beyond these thresholds, the duration of a consumer credit buy-back generally does not exceed:
- 12 years if the borrower is a tenant;
- 15 years if the borrower is the owner.
Or a repayment period between 144 and 180 months.
Maximum repayment period: and for a repurchase of mortgage?
Unlike the purchase of consumer credit, the purchase of real estate credit consists of merging two types of loans: consumer credit and mortgage. The duration of a buyout of mortgage with a guarantor rarely goes above 25 years, or 300 months. On the other hand, if the borrower owns a property and the bank puts it in mortgage, the repayment period can go up to 35 years, or 420 months. For a mortgage loan buy-back to be accepted by the bank, the property must represent at least 60% of the total financing.
Duration of a credit buy-back: the elements that can tip the balance
If the duration of a loan repurchase varies according to the policy pursued by the bank or the financing organization in terms of loans, the profile of the borrower counts for much. With a good file, the latter will be able to put the question of the duration of the grouping of loans on the table and possibly obtain an additional extension. The borrower will also get better financing since it will be easier to negotiate its borrowing rate with the banks. And who says lower rates, says reduced monthly payments!
Note: what is meant by a good file?
A borrower with a good record is a borrower who has, in particular, a stable professional and financial situation (no payment incidents or overdraft) as well as a satisfactory debt ratio compared to his income. The presence of a contribution is also well seen by the banks (10% of the loan amount is usually enough)!
Then, the durations previously given are for information only. Because it must be understood that the duration of a loan consolidation is conditioned by the age of the borrower on the date of subscription. As a reminder, the last monthly repayment must generally take place (variable depending on the bank) at the maximum at the age of:
- 75 or 85 years in the context of a consumer credit buyout, depending on whether the borrower is a tenant or owner;
- 90 years in the context of a mortgage loan repurchase;
- 95 years as part of a mortgage loan buyout.
However, if he wants to extend his repayment period to the maximum for his repurchase of consumer or real estate credit, the borrower will have to attach guarantees to his file. In addition to real estate, he can for example guarantee his loan with his life insurance, provided of course that the amount saved is sufficient. Loan insurance, often required by banks, is not necessary in this case. Not to mention that life insurance also constitutes a good argument for negotiating the rate of a grouping of credits, and thus, reducing the total cost!
With us, lighten your monthly payments in less time than it takes to say it and choose the duration of repurchase of credit most adapted to your situation (6 to 84 months). Only 24 hours after receipt of your complete file, you get a response. A new project? Attach a loan to your loan group and quickly obtain the corresponding amount, all at a reduced cost. Simplicity, flexibility!