Senior credit buy-back: is it good?
Is the use of senior credit consolidation a good thing? Are there other alternatives to this funding.
The reasons which push to regroup its credits while being senior
The approach of retirement is often a sign of declining income. A fundamental step that will have to be anticipated by a grouping of loans if the share of loan charges is too large. If the senior borrower already has a debt ratio close to 33%, the transition to retirement could have a serious impact on his financial equilibrium. There is therefore an advantage in using loan consolidation in this scenario.
Another example. A retired senior who wishes to carry out a project (travel, garden, car) and simplify his loan repayments will find complete satisfaction in the loan buyback operation. Important: the extension of the repayment period as well as the addition of an optional amount dedicated to new financing can lead to an increase in the total cost of the credit.
Alternative solutions to buying back loans for seniors
The advantage of requesting a loan buyback operation is to reduce the amount of your monthly payments, standardize the repayment of your debts and start off on a good basis. On the other hand, this type of operation can lead to an increase in the total cost of the credit.
Otherwise, the senior borrower can turn to alternative solutions like renegotiating the mortgage. He preserves his contract but reviews the terms of the credit by an addendum signed between the borrower and the lender. This allows during a period of falling rates to reduce the cost of credit, depending on the date of subscription and the rate obtained.
The sale in life annuity (for senior owners ) can also be a possible solution. This operation consists in selling his accommodation to a person (the annuitant) in exchange for the periodic payment of an annuity during the entire life of the seller (the annuitant).