The repurchase of revolving credit can be considered by the borrower if his repayment capacity decreases and he wishes to transform his revolving credit into a traditional personal loan
What is revolving credit?
The revolving credit is also called a permanent loan. Indeed, the revolving loan is based on the principle of a reserve of money that is permanently available to the borrower.
As long as this money is not used, the money reserve does not change and remains available without any interest being claimed. On the other hand, when this sum is used, the borrower must repay the capital used with the associated interest each month in order to replenish his reserve of money within the limit of the maximum authorized amount.
The amount of the credit, the monthly payments and the interest rate are established at the time of the credit contraction depending on the repayment capacity of the borrower. To use its cash reserve, the borrower can use a check, a transfer or a specific payment card (Tofinoga card, Barty or Tnac\ …). The interest of this type of credit is that it allows to have a sum of money easily and very quickly.
Can we buy a revolving credit?
The revolving credit is particularly appreciated by those who wish to have a quick sum of money which encourages impulsive expenses.
The problem with the revolving loan is that interest rates are often very high (between 12 and 18%) which can favor overindebtedness situations. According to the Ruel Bank, over-indebted individuals have on average 3 to 4 revolving loans. This type of credit represents more than 65% of the over-indebtedness files submitted to the over-indebtedness commission.
However, if the borrower’s repayment capacity decreases, he may include his revolving loan in a credit redemption to avoid bank incidents. Indeed, the legislation in force makes it possible to anticipate the repayment of all or part of a reserve of money before the initial deadline fixed on the contract.
To end the infernal circle of overindebtedness, the consumer can therefore include its revolving credit in a credit redemption to turn it into a conventional personal loan with the help of a specialized credit union. The restructuring of the new credit will reduce its monthly fixed charges over a longer period with reduced monthly payments.
Simulate your repurchase of revolving credit?
Credit union specialist, MoneyGo advises and accompanies people in a situation of over-indebtedness. Simulation of the repurchase of your revolving credits is free and without commitment. Depending on the number of credits to be redeemed, your income and your expenses, you will immediately get a first result on your new monthly payment. After study of your file, a reply in principle will be sent to you by our advisers in 24h upon receipt of your request for financing.