An accumulation of credits can quickly weigh on a household budget. If a loan is easy to set up, the situation becomes more complicated if the loans are cumulative.
Borrowing remains a banking operation widely used to finance a project. This may very well be a real estate acquisition project for which it will be necessary to borrow up to several hundred thousand euros for a purchase in the old for a construction.
The loan, useful financing for a majority of French people
Real estate is not the only item of expenditure that requires mobilizing large sums of money. Indeed, the purchase of a new or used vehicle may require a large sum. Unfortunately, not everyone is able to pay for these purchases in cash. Often, buying a car also involves borrowing. Things are somewhat similar for the purchase of consumer goods such as household appliances or simply to equip a home.
Several credits therefore more monthly payments
But by accumulating several loans, the monthly payments also accumulate. In this situation of accumulation of credits, even with high incomes, this can be felt on the budget of a household. The monthly payments are debited automatically, it is necessary to take them into account as soon as one draws up his monthly budget. Because their cumulative amount can quickly represent a significant part in relation to a household’s income (the debt ratio).
Banks usually have the habit of limiting debt to 33% of revenues. In other words, the monthly loan payments cannot exceed one third of the income of a borrowing household. But with an accumulation, this rate can greatly exceed 50% or even much more. Translation: In the event of a hard blow, it could be difficult for the household to honor these debts. In this situation, there is a bad reflex to dismiss immediately: take out a loan to repay a loan already in progress because it will involve adding a new line and entering an endless circle which can lead to the over-indebtedness.
Reduce the monthly payments of the loans, how to proceed?
However, with several loans outstanding, it is possible to readjust your monthly payments to match your income. How? ‘Or’ What? By redeeming the current credits. For this, it is recommended to contact an intermediary specializing in the repurchase of credit or rather grouping of credits, because it will indeed be a grouping itself.
To do this, current mortgage and consumer loans will be settled by a bank specializing in credit repurchase. A new schedule will then be proposed. On this occasion, the financial analyst in charge of monitoring will propose a monthly payment in line with the current level of household income.