Borrower at the head of a business, you have taken out several loans. Since then, you find yourself in a situation of excessive debt or need additional cash to carry out another project that is close to your heart. The buyout of merchant credit may be the solution! How does this financing technique work? Who can claim it? So many questions that are answered in this special file!
The repurchase of merchant credit explained
Credit repurchase is also known as credit consolidation or debt restructuring. Whether a borrower is private or professional, this financial solution will always work the same way. First of all, depending on the loans concerned, the bank will offer the borrower:
- Either a grouping of consumer credits: the borrower then has 2 or more consumer loans (personal loan, revolving credit, etc.);
- Or a grouping of home loans: in this case, the borrower has at least one consumer loan and one home loan.
Note that in a repurchase of credit, the borrower also has the possibility of including other debts, like tax debts or family debts, for example.
Then, the very principle of buying merchant credit is fairly simple to understand. The credits are combined to form a single one, with single rates and monthly payments. The goal of this financing solution is to reduce the amount of monthly payments by extending the repayment period. The grouping of credits thus allows the borrower to breathe new life into his treasury. Depending on his situation, he may integrate a new loan into his credit pool. However, its amount will be limited and it can only be used for personal use.
Note: is it necessarily more expensive to buy back credits?
No. It is up to the borrower to carefully observe the total amount of the credit combination, expressed by the APR (annual effective annual rate). This rate will ideally be lower than the average rate for old credits. What will vary this rate is mainly the duration of repayment. The more it is extended, the higher the total amount of the credit. So you have to try to find the best compromise!
How to build my merchant credit buyback file?
A bank does not accept a merchant credit repurchase file as it would accept the file of a professional belonging to another category, or even that of an individual. The process is more complex. This is what discourages many self-employed workers. However, the latter are more and more confronted with financial problems (excessive debt, heavy taxation …) and more than ever need to reorganize their treasury in the long term. However, all is not lost in advance!
To have a chance of gaining access to credit consolidation, the borrower will have to focus on putting together his file. And above all, this file must be solid. Indeed, the merchant’s economic and financial situation will be studied with a magnifying glass. Through various supporting documents (balance sheets, books of accounts, etc.), he must, among other things, prove:
- that his seniority for his activity is at least equal to 3 years;
- that its profits over the past 3 years have been increasing, or at least stable;
- that he has sufficient equity.
Also attach to the file, documents such as bank statements, rental lease or title deed, or even the amortization schedules of loans to be bought back.
Important: personal debts only
The repurchase of merchant credit only concerns credits for personal use. Professional debts are excluded from the procedure.
Besides the repayment period, what else can you bet on to get a good rate?
Simulation tools and comparators
If the repayment duration affects the total amount of a loan, the bank also has a role to play. Indeed, from one bank to another, the borrowing rate can vary widely. Instead of going headlong into a buyout of merchant credit, it is better to put the offers in competition. How? Using online simulation tools and comparators. This is probably the best solution to find the lowest rate on the market!
The loan repurchase broker
The borrower can also use a loan repurchase broker. The strengths of the broker? His network of partners, allowing him to obtain loan conditions and advantageous rates, as well as his experience, which he will use to help the borrower to build a viable financing plan. Attached to a merchant credit repurchase dossier, this financing plan will be viewed positively by the bank! It will prove the seriousness and the motivation of the borrower.
Another possibility to lower your borrowing rate: use your right to delegate insurance. If the borrower insurance remains optional (for a repurchase of consumer credit as for a repurchase of mortgage), the vast majority of lenders require it. However, nothing obliges the borrower to accept the insurance offer offered by the bank buying back his credits. He can very well subscribe to a grouping of loans with one establishment and take out insurance in another.
Take advantage of a merchant credit buyout at constant rates and monthly payments! With us, no hidden fees or deferral of monthly payments that could jeopardize your cash flow, and even less obscure credit such as revolving (only the personal loan repayable at a fixed rate). Everything is simple and clear. Take a few moments to perform a simulation and discover our offer!