Is it possible to transform my revolving credit into another loan?

Posted on June 22, 2020
transform your revolving credit

Revolving credit has the advantage of being flexible, but comes at a fairly high cost. Also, its repayment period and its outstanding capital increase as it is used. Therefore, revolving credit is highly likely to weigh heavily on the borrower's budget in the end. Is there a way to transform this credit in order to fix the monthly payments? The answer is yes, here are the few possible options.

Convert revolving credit into amortizable credit

It is possible to convert a revolving credit into a small depreciable credit . The principle consists in replacing the revolving credit in a traditional loan of an amount equal to the sums already used, and this, at the rate of a traditional loan. The balance of the revolving credit is then settled and reimbursed under the same conditions as a conventional credit.

It should be noted that this operation can only be carried out on the date of renewal of the contract, and within a maximum period of 20 days before the renewal thereof. The borrower can contact his current lending organization or canvass other establishments.

Consolidate revolving credit with other loans

Another alternative is to combine your revolving credit with other types of loans. It can be a personal loan, car loan or home loan. All of the borrower's loans are then grouped into a single amortizable loan. This operation is commonly repurchase of credit.

The revolving credit is thus cleared by the financial body responsible for the loan buyback operation. In return, the borrower has only one loan at a lower rate, with reduced monthly payments and a fixed repayment period. This solution aims in particular to reduce the monthly payments of the borrower and to allow him to better manage his budget.

Terminate your revolving credit contract

The regulations allow a borrower to terminate their revolving credit agreement at any time. This operation implies that the amounts used are refunded, and terminates the renewal option. The outstanding capital, the monthly payments and the duration of the credit can no longer increase. Note that the lender cannot deny this right to the borrower. The revolving credit then takes the aspect of a depreciable loan.

However, the interest rate applied remains that of a revolving credit. Which can still be quite expensive given the relatively high price of the latter. It may then be preferable to ask your lending institution to transform its revolving credit into amortizable credit. Finally, it is generally advisable to do an online revolving credit simulation before subscribing to this type of credit to be sure beforehand of being able to repay it.