Redemption of credits : From what amount is this advantageous?
From what amount, can we take advantage of the advantages of a loan buy-back? The answer will depend on several criteria which we will give you details. In any case, whether it is to rebalance your finances, lighten your monthly payments or even free up additional cash and finance new projects, your loan buy-back can prove to be very profitable, especially with the historically low level of current rates. Let us see together the conditions to be met, and in particular those concerning the minimum and maximum amount of your loan repurchase.
The criteria that will determine the amount of your loan repurchase
While credit consolidation operations generally involved large loan amounts, standards have now changed. Now, it is possible to take advantage of a loan buy-back even when the amount is relatively small.
This amount varies according to the criteria of the lending institutions, but it is also a function of the borrower’s repayment capacity, its debt ratio, its financial plan, the capital remaining due and the types of credits to be bought back.
Furthermore, the ideal situation requires that you be in the first half of the term of your loans, when it is the interest that you repay. The more interest you have left on your old loans, the greater the gain if you obtain advantageous conditions for the single credit that will replace these credits.
Generally, we consider that the difference between the old rate and the new one must be at least 0.7%, or even 1% for you to be a winner. However, you should also not forget the gains you can get on your new loan insurance.
The right reflex: in any case, your situation must be studied in a personalized manner. It is therefore in your best interest to consult loan repurchase experts such as the advisers of Spin Lender. They will be able to guide you and tell you if the gains generated by your credit buyback will be greater than the costs generated by your end of contracts.
Amounts for a repurchase of mortgage loans
When you decide to buy back “mortgage” credits, which will include a mortgage with one or more consumer loans, the minimum outstanding capital is generally limited to $ 50,000.
Below this amount, the interest of the transaction may be limited by the sum of the costs linked to the redemption, such as the administrative costs, the mortgage costs, and the termination costs (penalties refund).
Reserved for owners, first-time buyers or borrowers who can provide a mortgage guarantee, this type of loan repurchase can be carried out on amounts which may amount to $ 1,500,000, and even 2,000,000. $ in certain situations.
However, except in exceptional cases, the maximum amount of loan redemption may not exceed 90% of the value of the property put into mortgage.
The repurchase of credits without mortgage and repurchase of consumer credits.
If you are the owner or the owner of the property, for your repurchase of credits without mortgage, the maximum amount will be $ 200,000, with a borrowing term limited to 15 years at most.
On the other hand, for tenants or people accommodated free of charge, the repurchase of credits without mortgage must be made for a maximum amount of $ 100,000 over a period which cannot exceed 12 years.
What if you only combine consumer credits or personal loans?
In this case, the legislation limits your type of loan consolidation to a maximum amount of $ 75,000. In addition, the minimum outstanding capital should not be less than 10,000 or 15,000 $, depending on the organizations. However, it is also possible to obtain consumer loan repurchases for very small amounts.
Some organizations will grant you credit redemptions from $ 1,500, provided that you meet their acceptance criteria.
Good to know: the granting of a loan buy-back also depends on the borrower’s debt threshold. Varying according to lending institutions, this threshold cannot generally exceed 30%, but it also depends on the financial situation of the subscriber. In general, the higher the income, the higher the margin of the debt ratio can be (in some cases, up to 50%). The rest-to-live of these profiles is sometimes sufficient to allow them to maintain a balanced budget despite a debt ratio higher than the norm.