How and why to ensure its repurchase of credit?

Posted on June 23, 2020
credit redemption insurance

The repurchase of credit is an operation which makes it possible to group together all the debts such as monthly mortgage payments, consumer credit, tax debts and others, in a single loan at reduced rate. As the main advantage, the borrower only pays one monthly payment. In this way, he thus reduces his debt ratio and regains a new capacity for investment or savings. The borrower can choose between two types of credit repurchase, if the first is the repurchase of consumer credit . As the name suggests, the borrower only groups together his consumer loans: personal loan, revolving credit, car loan, work loan and others. The second type is mortgage loan repurchase. In addition to consumer loans, the operation includes a mortgage. As such, to protect against the risk of non-repayment, the repurchase agency takes a mortgage on the borrower's property.

Why take out credit redemption insurance?

Life has learned that no one is immune from hardship. Following a hard blow or an unforeseen event, the death of a spouse for example, the borrower may have difficulty repaying the loan. By taking out credit redemption insurance, the borrower guarantees the repayment of his loan even in the event of disability, death, job loss and others. In these cases, it is up to the borrower insurance to cover the repayment of the loan. In practice, there is no obligation to subscribe to credit repurchase insurance, but this can be imposed by the lending institution depending on the type of operation. Also, for a consumer credit, and at the same time, for a repurchase of consumer credit, credit insurance is optional. However, for a mortgage or for a mortgage loan repurchase, loan repurchase insurance is almost obligatorily requested by the lending organization. In any case, before choosing a particular insurance, using an online credit redemption comparator is strongly recommended.

Borrower insurance: an obligation?

The borrower is free to sign or not the insurance proposal from the credit repurchase organization proposed by the bank. Indeed, this operation is subject to the Lagarde laws (2010) and Hamon law (2014). Also, before signing the loan buyback offer, the borrower can opt for a borrower insurance proposal other than that of the lender that offers the credit buyback. All the same, after signing the credit buyback offer, the borrower can terminate his borrower insurance and choose another until the first anniversary of his contract.