Sometimes, difficulties and unforeseen events accumulate : repairs to be made on the car, a fine or an energy bill that is a little too high that you cannot pay immediately… As time goes by, it can become complicated to s to pay his debts , because in addition to these, other problems have been added, including late payment penalties and agios.
Although this is often discouraged by banks, some households choose to take out a loan to repay their debts .
If the solution most often chosen is the personal loan , the most effective if you have several credits in progress is the repurchase of credits .
Devissima presents the advantages and constraints of these two methods.
The personal loan: a practical credit
Usually, the personal loan is a form of consumer credit intended to finance a project for which one does not wish, or cannot, mobilize his savings.
Unlike assigned credit, such as work or car credit, the personal loan is not directly linked to a service or a purchase. It is therefore not necessary to provide a quote or an invoice to release the funds .
On the contrary, it consists of a sum of money paid directly into the borrower’s account and free to use . Its amount is capped at €75,000 and the repayment term generally varies from 3 to 84 months (7 years), but it can reach 120 months (10 years) under certain conditions.
Why avoid taking out a loan to repay a debt?
It is not uncommon for a person or a household to choose to use a personal loan to pay off a personal debt – for example, contracted with a loved one, or for an unpaid bill – or even free themselves from another credit , such as a revolving credit associated with a bank or loyalty card.
The disadvantage of this type of approach is clearly its tendency to increase the household debt ratio . Indeed, there is a great risk of seeing the costs of the various loans taken out accumulate. In the event of an unforeseen event, the personal loan which was to settle the debts is used for other expenses and it is then the monthly payments of accumulated credits which make keeping the budget particularly complex.
This accumulation of credits can lead you to over-indebtedness , filing and a banking ban.
Fortunately, if you have two or more outstanding debts, there is an alternative to consumer credit to restructure your debts: credit consolidation .
An effective alternative: the purchase of debts and credits
For there to be a consolidation of credits, you must have at least two receivables in the process of being reimbursed.
These can be consumer credit (personal loan, revolving credit, work or car credit, etc.), real estate loans, but also certain personal and family debts, even unpaid debts (rent, water bill, pension eating…).
When you make a purchase (or consolidation) of credits, a financing organization repays all your creditors at once and sets up a substitution loan .
You only have one monthly installment to pay, which already makes it easier to keep a budget.
This monthly payment will be adapted to your income . Depending on the amount of credits collected, as well as your income, you will be able to lower your new single monthly payment by up to -60% *. With this, your entire debt ratio decreases.
You then eliminate the risk of over-indebtedness.
If you have an additional project or an unforeseen event , you can also request additional cash . This sum must remain reasonably proportional to the overall amount of the substitution loan, into which it is directly integrated. Its reimbursement is then included in the new single monthly payment.
Are you looking for the personal loan or the purchase of credits best suited to your situation and at the best rate?