Have you been fired? Are you independent and strongly impacted by the current health crisis? Or are you a part-time employee and you cannot cope with your current expenses? Let us take stock of your personal finances and the solutions available to you in the very short term.
If your loan monthly payments are currently suffocating you, it may be useful for you to think about a redemption or consolidation of credits. This will allow you to adjust the due date to your current income and will save you from paying a lot of fees at your bank, as you cannot keep up with the bank due dates you currently have.
Are the rates still attractive?
During and after the COVID-19 crisis bank rates have risen, as banks have already anticipated a less favorable economic situation for 2020, resulting in a higher number of defaults among their customers.
According to the estimate of a provider in the field, the rates of real estate market are on the rise at the end of June, after the stock market and economic crisis which started in France in March with containment. The surprise rise in real estate rates in April was due to partial activity by banks and worries about the economic situation.
Is it a good time to negotiate credit ?
Renegotiating credit when rates are going up does not seem like a good idea. The reality is not so simple, you have to do a full calculation to see if it's still interesting for you to do it. It depends on several factors:
- your current rate
- your current monthly payment
- your current income
- your current charges
If you have lost your job or are on short work and the future looks very uncertain, it may be worth taking the time to renegotiate your credit. This will allow you to:
- adjust your current monthly payment according to covid income, at least the time to find a job or a more stable situation
- to be able to cover all the charges you have to face, because if you adjust your monthly payments downwards, you have more cash available
- not to pay full of bank and agios commissions, because you are late on all your credits and the costs accumulate
- if your rate is still too high (2,3-4% or more) it is always worth renegotiating your credit, because current rates are still historically low.
So yes, the rates are going up and we should perhaps take advantage of them as long as they are at current levels, but they are still low, compared to the rates we saw 2-3 years ago, and which were higher than current rates.
Credit consolidation - another possible solution?
The repurchase of credit is as interesting as the renegotiation of your current credit or sometimes more interesting still. If you have several credits and want to combine them into one so as not to have a single deadline, adapted to your personal situation, do not hesitate to think about grouping credits. This will allow you to have a single contact, a single deadline and above all a single file to manage.
With the fall in rates, we anticipate an increase in the ancillary costs of banks, which will gain more in administrative costs and all kinds of management and account maintenance costs than in interest proper. The weight of ancillary costs has only increased in recent years, at the same time as the drop in rates has become permanent in the French banking and real estate landscape. You therefore have an interest in grouping your credits to pay all these costs once and not to multiply the interlocutors and additional costs. Beyond these personal advantages, it is also more ecological not to multiply the files.
And why not sell your credit?
Another solution to deal financially with the crisis and to sort through these personal finances is the Credit Buyout. Today there are many providers on the internet who offer this service, for a commission.
The advantage is that you do not have to run after your bank and send registered letters: you put up the file online and within 15 to 30 days you can have your credit redeemed by another banking establishment. By the way, you can adjust your monthly payment, reduce your rate, simplify the management of your personal finances, free up cash flow for your urgent needs or even lower your debt ratio.
To see if the repurchase of your credit is interesting, it is interesting to go and find information on specialized sites. Some even offer simulators and an advisor calls you to inquire about your case. All credit files are necessarily unique, that's why it is interesting to be accompanied by professionals from the sector, remotely, without having to travel. This is also a ecological approach and concerned about your health.