Friday, December 11, 2020

Credit repurchase and fixed-term contract

There is a tendency to believe that only borrowers with a CDI (open-ended contract) can claim the consolidation of credits. This idea is wrong! Credit repurchase and CDD (fixed-term contract, therefore) are entirely compatible. We will explain to you why, and above all, how to convince the bank.

Credit consolidation: less cautious banks facing fixed-term contracts

Credit consolidation: less cautious banks facing fixed-term contracts

Today, more than 8 out of 10 French people are hired on fixed-term contracts, whether for replacement, seasonal work, or to respond to temporary increase inactivity. Faced with a job market tending more and more towards precariousness, banks today know how to show adaptation. Thus, even if they will always prefer to deal with a borrower in CDI, a borrower in CDD will not be systematically slammed the door in the nose.

Note: CDD is sometimes a choice
A person can chain the CDD because he chose it. Like an interim or freelance, she may simply wish to be able to enjoy a certain independence. But that does not necessarily mean that his financial situation is fragile or compromised.

What is credit repurchase and why use it?

Before seeing how to buy a CDD loan, it is important to know the usefulness of such a transaction. When they buy back credit, the banks collect all the loans in progress. There is then only one single rate loan. For the borrower, this implies a single monthly payment, but also an extension of the repayment duration (and therefore, potentially, a higher total cost of the loan, since the borrowing rate increases in proportion to this duration).

There are two forms of credit repurchase:

  • the redemption of consumer credit, making it possible to redeem at least 2 consumer credits);
  • the repurchase of mortgage, which makes it possible to buy back at least one consumer loan and one mortgage.

A borrower may want to redeem his credits for several reasons. Overall, this situation can arise if:

  • the borrower needs cash for a new project and wishes, as such, to take out another loan (this will then be included in the repurchase);
  • the borrower encounters difficulties in repaying his credits (the goal: to avoid a situation of over-indebtedness).

The final objective of the credit buy-back is to allow the borrower to gain purchasing power, by reducing its debt ratio.

Credit repurchase and fixed-term contract: file your file with the bank

Credit repurchase and fixed-term contract: file your file with the bank

Against all expectations, a CDD borrower wishing to redeem his loans is in fact housed in the same boat as a CDI borrower. At least, more or less: he must show his credentials by proving that his professional situation is stable (no interruptions over too long periods).

Good to know: a CDD can be equivalent to a CDI…
If the borrower has not had a period of interruption of work during the 3 years preceding his request to buy back credit, the bank will consider him as a borrower in CDI.

The elements to be attached to a credit repurchase file for a CDD will thus be the same as for any other type of employment contract (CDI, interim…). Among other things, the borrower must produce:

  • a photocopy of his employment contract;
  • his last tax notice;
  • the current consumer and property loan offers, as well as their amortization schedules.

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