Why a 35-year credit redemption?
The redemption of credit consists in gathering all its credits to form only one. The goal is to obtain a single monthly payment that would be lower and payable over the long term. This would allow some to breathe more financially, save some money, or fund a particular project. Their financial management becomes more flexible with a lower debt ratio and a higher purchasing power, which values their situation with their interlocutors. An accepted credit redemption implies that you are able to cover your monthly payments and that you are therefore a reliable customer and a sign of confidence.
This parameter is to be taken into account because people in emergency situations are the main ones affected by long-term credit purchases. This is to avoid over-indebtedness as soon as the more they will be in financial difficulty, the more it will be difficult for them to accept their file. Extending the repayment period allows them to benefit from these reduced monthly payments and this debt ratio and to reassure themselves, at least in the short term before recovering their health, little by little with a better purchasing power on the rise.
But sometimes, the goal is to provide financing for unforeseen expenses that could blow up your already weakened budget. If the amount of these expenses is difficult to estimate at first, it may be wise to arrange reduced monthly payments. However, the repurchase of credit does in any way increase your credit since it involves the accumulation of your credits as well as the additional expenses (file or notary) and the rates practiced by the organizations.
Example of a 35-year repayment (420 months)
With a customer accumulating credits amounting to 90000 euros for 3000 euros of monthly installments, if he subscribes to a repurchase of credit, his credit would reach the 110,000 euros with the fees and taxes included but the monthly payment to be paid over 420 months will be 262 euros.
Why negotiate the repayment term?
Extending the repayment term does not only have advantages, on the contrary. The credit institution changes its interest rate and charges its additional expenses according to this repayment period: the longer it will be extended, the higher these fees and rates will be. will be high. Indeed, the organization wants this operation to be profitable to him, otherwise it would have no interest to accept your file.
It may be that by saving money, you end up losing more money. So choose an offer that is best suited to your abilities and not just your needs and desires and do not forget any influencing factors. In any case, in case of too critical or too unstable, you will address a plea of inadmissibility since you can not guarantee the organization a return on investment. Generally, if your debt ratio is more than one third of the amount of your income, you will have much more trouble convincing your interlocutor.
In general, it is not always necessary to opt for long-term credit. It is more applicable for people in emergency situations who need to reassure themselves as quickly as possible, whether because of unexpected expenses or daily mismanagement of their expenses. On the other hand, people who have fewer constraints and who mainly seek to finance a project or save money to oxygenate their budget have less interest in extending their repayment period.
Afterwards, it is sometimes difficult to estimate alone in advance its financing capacity and what amount of monthly payment is the most suitable, especially if it varies according to the rates charged by the organizations. So remember to prepare your best case through an intermediary, whether a broker or online comparator. It studies the best offers on the market and adapts to your situation according to the data you transmit so that you can have a first idea of your future monthly payments.