5 Pitfalls to Avoid in Loan Redemption
Loan redemption has been popular with borrowers for a few years. This solution aims to improve their financial situation by reducing their monthly payments and allowing them to undertake new projects.
New loan rates
The rate is among the determining factors of the cost of a loan. If you have a credit with a variable credit rate, a personalized study of your case is essential before adopting the same solution or switching to the fixed rate. You must be wary of attractive offers from credit organizations. The rate they propose can double in value during the redemption transaction. This is why it is strongly advised to be well informed before making a decision. The comparison of the offers proves to be essential. It should not be limited to bids offered by credit institutions. You must also consider the impact of the credit buyback on your current situation. Do not hesitate to call a broker to help you understand the true operation of the Loan redemption and the effects of each device stipulated by the contract.
Monthly payments and the duration of the new credit
The repurchase of credit indisputably entails the restructuring of your loan. If your current monthly payments are too high and your remaining income is too low, this operation can correct this situation. It reduces your monthly payments to increase your living space and improve your quality of life. However, this practice is not risk-free because it can lead to an explosion in credit life and over-indebtedness if you can not manage your finances properly. Loan redemption simulations are needed to get an idea of the monthly payments and the duration of the new loan.
Similarly, under a conventional credit, the credit pool generates a series of fees that can have a significant impact on its cost. It may be more difficult to negotiate these fees depending on your situation. If you want to take advantage of a pool of credit at the best price, you must bet on the comparison of offers. To avoid unpleasant surprises, it is important to know the total cost of the transaction before signing the contract.
Counter-proposals from the current bank
Your current bank can make you a counter-offer to better keep you. Before declining or accepting your offer, you must weigh the pros and cons. Do a calculation of what you have to gain and evaluate what this would imply about your situation. But in principle, the benefits of the counter-proposals of the bank remain less important than those of the body that offers the repurchase of credit especially on mortgage.
If the use of a broker’s service can facilitate credit consolidation and allows you to get the best deals, its intervention is not just a benefit. Brokerage fees are a free fee. They are defined according to the specificities of the situation.