It is possible to buy back a revolving credit, formerly known as a revolving credit, in the same way as another consumer credit. In the context of a grouping of credits, the operation makes it possible to lower the debt ratio, regain cash and, above all, to get off to a good start! We will explain everything to you!
The revolving loan: a credit reserve
A revolving credit is a consumption credit : the borrower has a sum of money usable without justification made available by a financial institution. This credit builds up over repayments so that a small capital is always available. We talk about permanent credit hence its old term ” revolving “. Nevertheless, the full advance refund is possible at any time and without penalty.
The benefits of the revolving credit redemption
The interest rates of the revolving credit most often rises to 20% despite the Lagarde law that tries to control it, so that the capital repaid at each monthly payment is minimal. Redeeming a revolving credit is therefore a significant saving.
Moreover, this type of credit is endless if we let ourselves be tempted by the reconstituted capital. The cost quickly becomes exorbitant. Nevertheless, the French accumulate them in the form of a credit card to use in the stores. Among the over-indebtedness cases handled by the Banque de France, revolving credit was 21.3% in 2016 according to the institution.
Two redemption procedures
All consumer loans are convertible into a single credit, even if there are several revolving loans. Two procedures can be envisaged:
It is possible to turn a revolving credit into a personal loan at a much more attractive and fixed rate. It is necessary in this case to inform by simple letter the financial institution on the anniversary of the renewal of the credit of your will to pay it.
Consolidation of credits, if several other loans are part of the repurchase, repeats all outstanding amounts to repay them. It is useless then to inform your financial institution, it is a simple early repayment intended to lighten your fixed charges.