Credit redemption, credit consolidation… The difference between the two is not always clear to everyone. Today, we will try to explain to you what distinguishes these two terms.
Let’s start by taking stock of what is called credit consolidation. It is not always easy to navigate with all the definitions about these two modes of debt restructuring. Credit consolidation is defined as the process that allows you to consolidate all your credits into a single loan. Thanks to this approach, the new loan defined by the addition of all your credits will benefit from a single rate. Thanks to the consolidation of your credits, you can also benefit from a reduction in your monthly payments. This will result in an extension of the maturity of the loan.
In addition, you can also opt for a shortening of the maturity. Consolidation of credits is a solution offered to a borrower who is having difficulty paying the monthly payments of many debts at the same time. Credit consolidation can be done with specialized institutions. They are in fact only subsidiaries of large traditional banks.
The repurchase of credit is used to refinance a particular credit. This is an attractive approach when the interest rate is falling. You can redeem your credit to take advantage of this advantageous rate. Where credit redemption and credit consolidation come together is when you want to redeem multiple credits at the same time.
In this case, the steps are almost the same. Many institutions use these two definitions as synonyms. Whether it is for a credit redemption or a credit consolidation, you often have to solicit an establishment other than your current borrowing establishment.
The operating principle of redemption and credit consolidation is almost the same. The goals are even more similar. In order to choose between these two options, you need to have an exact idea of how you want to refinance your debts. For a single mortgage in this case, you can opt for a buyout.
With several credits in progress, consolidation (plus redemption) is in order. If you need to see more clearly, the best thing is certainly to inquire with a banking institution. Do not hesitate to consult the site of My Money Bank, expert in the repurchase of credit for more than 25 years. You will also find on their website, a complete guide on the repurchase of credit. The repurchase and the grouping of credits are often confused solutions. Institutions not helping, because these terms are often used as synonyms. Before opting for one or the other, it is essential to seek professional advice.