In order to optimize their financial situation and reduce their monthly repayment amount, a borrower may consider applying for a loan combination with the bank. Whether he does this alone or through a broker, his file must be perfectly constructed.
The insurance to save time, but also and above all to increase your chances of having your credit repurchase dossier accepted by the financial organization. What do the documents to be attached relate to? What criteria does the bank take into account before making its decision? What to do in case of refusal on his part? So many points raised in this article!
Tidying up your credit repurchase file: the documents to include
As part of a consolidation of consumer or real estate loans, a whole range of documents will be requested by the bank or the credit institution. The primary objective is to analyze precisely the situation of the borrower. The latter must, therefore, attach documents relating to:
- his marital status (copy of identity card or passport);
- his family situation (marriage contract, PACS agreement, divorce judgment, etc.);
- their professional situation (copy of the employment contract or certificate from the employer dated less than one month);
- the income he receives (last 3 payslips or last 3 balance sheets for the self-employed, last tax notice, proof of additional income, etc.);
- at his place of residence (proof of domiciles such as gas or electricity bill, or accommodation certificate; housing tax or property tax depending on whether the borrower is a tenant or owner of real estate);
- to its budget (account statements, any offer of consumer credit or current mortgage offer and its amortization schedule, receipt of rent if tenant, etc.);
- its assets (title deed, home insurance certificate and a recent estimate of the property if owner, savings statements, life insurance statement, etc.).
Note: time is of the essence
A complete credit repurchase file, well organized, but also quickly delivered to the bank, is a very good point for the borrower. Ideally, prepare as many documents as possible before you even make your request! If you use a broker, they can help you build your file.
Credit consolidation: as perfect as it may be, your file is not everything
The organizational aspect is one thing. The content of the documents is another! Once the bank has the borrower’s credit repurchase file in hand, it will focus on dissecting it. However, certain criteria may constitute grounds for refusal.
This can, for example, be the case if the borrower’s professional situation is considered unstable or insecure (fixed-term contract with long periods of interruption, a self-employed worker working for less than 3 years, etc.). The bank or credit institution can, however, give a favorable response if the borrower has sufficient living space.
On the other hand, a borrower benefiting from a conventional recovery plan (following the filing of an over-indebtedness file) will be systematically excluded from a credit consolidation operation. Then, many other parameters will be taken into account, such as those mentioned below.
The number of credits in progress
The more loans the borrower has under his belt, the more reluctant the bank will be when it comes to buying back credit. It is also not in the interest of the borrower: we can consider that from 7 or 8 loans, the redemption rate will be much less attractive. The credit agency will also grant a shorter repayment term. The amount to be reimbursed each month will therefore logically be higher.
The borrower’s debt ratio
From one bank to another, the debt threshold admitted varies widely. But in general, when the borrower’s debt ratio is more than 40%, the bank tends to reject the request. Unless the amount of his income is high enough to allow him to repay his loan without encumbering his remainder to live.
The borrower’s banking behavior
If it turns out that the borrower’s latest account statements show overdrafts and other payment incidents, it will be very difficult to get a loan buy-back. The credit institution will indeed consider the applicant as a risky borrower.
My credit repurchase file is rejected by the bank: solutions?
All is not lost! Depending on the borrower’s situation, a competing bank offering more advantageous and less strict conditions could potentially accept its credit repurchase file. Otherwise, as soon as its situation will have improved and stabilized over time (increase in income, the closing of the over-indebtedness file, etc.), the borrower may make a new request. This will have a better chance of being accepted.
By submitting a credit repurchase dossier with Good Credit, what would be the amount of your loan according to your situation and the repayment term chosen? To find out, make a free simulation and receive your personalized offer instantly!