The current crisis due to COVID-19 and its economic repercussions has forced a good number of households to adapt their lifestyle and consumption habits. In this context, loans stand out as an important financial management tool, provided they are well managed. However, given the ease of access to financing, it is not uncommon for unforeseen events to cause financial problems. In these cases, the solution is a credit redemption simulation or a loan renegotiation.
Credit Redemption Simulation: How To Avoid Over-indebtedness?
Using credit is not in itself a bad thing, as long as it is used judiciously, it can be a good way to save. That said, if you can’t meet your bank’s obligations for one reason or another, it’s best to consider one of the two main solutions to get out of it, especially the potential situation of over-indebtedness. escape from. It is really a question of requesting a renegotiation or a repurchase of the loan.
Before choosing either of the two solutions, it is important to know the differences so as not to make a mistake. For example, if in addition to your mortgage, you have to pay off your car loan and consumer loan. Paying off these monthly installments can be a real challenge at the end of each month, which is why consolidation can be a relevant solution. In this sense, it is recommended to go through the Lesfutures Credit Redemption Simulator to be aware of all the costs involved.
What is the interest in repurchasing the loan?
When we talk about credit redemption simulation, we mean the possibility of finding the best solution to consolidate all your credits into one. In this context, your bank or any other financial institution takes care of the sum of all your credits, which allows you to settle all your debts through one contract and one monthly payment. This translates into a reduction in monthly payments, but also in the interest rate.
It should be noted that the fact of not being able to pay its deadline does not guarantee approval of the repurchase of credit. Don’t forget that financial institutions have appraisal criteria that prevail even when an entity takes on the risk of financing all of your loans. For this, as with a consolidation, the risk that was previously “spread out” across multiple financial institutions must be entirely assumed by a single one.
Why choose the option of Credit Renegotation?
With regard to re-negotiation, it is important to know that the bank is not obliged to do so, but the borrower can always request it. Credit renegotiation can be considered as an alternative to credit redemption simulation, as it guarantees a reduction in monthly charges with credit. In addition, renegotiation makes it possible to make interest rates and terms more attractive, which are prevalent within the framework of the simulation repurchase of credit.
In some cases, negotiating a loan to repurchase may be more beneficial, particularly if the borrower does not wish to repurchase a particular credit, either because it has an attractive interest rate, or because it is about to expire. . In fact, unlike what happens with repurchases, you can try to get a better position, only for those credits that cause you the most hardship at the end of the month, leaving other debts out of operation. give.
Although credit buy-back simulations and renegotiations are not that easy, they can help you regain control of your personal finances. In this sense, both solutions have advantages and disadvantages, so it is always important to analyze your situation before deciding which of the two is better.