Purchase of loans with cash in addition
Any future borrower who wishes to include in his credit buyback operation an additional amount of money to finance a new project may apply. This is called an additional cash flow that can be added to the total amount borrowed, which includes all remaining capital due credits that are repurchased. It may allow the borrower to realize a new purchase or to carry out a project, while being integrated in the financial arrangement of the purchase of credits. As a result, the debt restructuring operation not only helps to put personal finances in order to regain some serenity, but also to indulge oneself while remaining in its debt capacity.
Understand what extra cash is
In a loan consolidation transaction, the additional cash that the borrower can claim is called the amount allocated. If this amount of money can be included in a credit buyback operation, it is not entirely free to use, since it is included in a financial package that falls into the category of consumer credit. It is therefore the same process, depending on the same legislation, which means that the lender will still worry about the destination of this amount of money granted, in addition to the total amount of credits that will be paid. The amount allocated is therefore, as its name suggests, assigned to a project, to the extent that some lenders go as far as proposing the acquisition of real estate with the purchase of credits. Of course, everything will depend on the borrower’s profile, its repayment capacity and its debt ratio. Note that the borrower will in principle not need to submit a quote, order form or invoice to get this extra cash, but it will still depend on the project and the lender.
In any event, the additional cash provided in a loan consolidation transaction is not a new credit. In fact, it is simply included in the total amount borrowed under the single credit subscribed during the redemption. This amount of money available is paid to the borrower on his bank account at the time of the release of funds and allows the realization of a new project financing, purchase or leisure. This will have been prepared upstream, so that the borrower does not leave his debt capacity and can repay his new loan serenely. In addition to representing a sum of money available for a project, the extra cash can also be a stepping stone to guard against the vagaries of life, or become a security savings to be able to have a reserve of money for one or projects for the future.
It should be noted that this is an optional approach and many loan consolidation does not include additional cash. Depending on the desired amount, the demand leads to an increase in the amount of the credit, or even the repayment period and therefore its total cost. In the context of a mortgage purchase, the amount of additional money borrowed can be more substantial because the property put in mortgage represents a security for banks and lending institutions.
In summary, it must be understood that the granting of additional cash is not a new credit. On the contrary, it makes it possible precisely to avoid making a second credit by being integrated in the only financing operation that is the purchase of credits. In this sense it also avoids the costs related to the subscription of a credit and can finance as much the purchase of a car or a new computer as the realization of work or a trip.
Amount and benefits of additional cash
The financing plan put in place by the credit institution at the time of the merger will take into account all the credits to be bought back and the additional amount of money granted. This option is open to any borrower, over the age of 18, as for any conventional redemption of credits without cash demand. It concerns employees, retirees and the self-employed. For the latter, the conditions for granting additional cash may be stricter and the amount more limited because of the risk of seeing the amount of money borrowed intended for the enterprise whereas it can only be granted in the part of a personal project.
In general, the additional cash can not exceed 15% of the amount granted under the redemption, but it is not really limited by a ceiling. It will mainly vary depending on the financial and personal situation of the borrower and certain main criteria that are: the use of the additional amount borrowed, the rental situation of the borrower, that is to say, owner or tenant and finally the type of purchase of credits subscribed (purchase of consumer credit or repurchase of mortgage). From the moment when any project is reasonable and falls within the criteria of the lending organization it is admissible, provided of course that it does not generate over- indebtedness. It will, of course, be necessary to establish a feasibility study, since the amount allocated will also depend on the borrower’s overall profile and repayment capacity.
The integration of additional cash will mainly allow the borrower to take full advantage of his credit buyback operation to manage his finances. In addition to the advantages of the loan consolidation itself (lower interest rate, new, more favorable monthly payment, redeemed repayment period, etc.) it can either finance a new project, which will allow it not to give credit again, with all the administrative costs and inconvenience that accompany it, either to make a reserve of money if necessary. Another important benefit of the additional cash flow request is that the homeowner borrower can dispose of this amount to carry out either renovation or development work or have a contribution for a new credit related to a property.
In all cases, this sum of money is directly included in the monthly payment of the new credit related to the redemption, whether initially allocated to a particular project or not. The most important thing is to prepare the transaction well, by studying the need for liquidity when making the request. Once all outstanding loans (revolving loans, personal loans, purpose loans, revolving loans, etc.) has been listed and the total remaining capital due is established, the borrower can then define as revenue, his charges and fixed costs and his debt ratio, the additional sum he can still add.
He can then begin to simulate online by adding the amount of cash desired. For this he can fill an online simulation form on one of the many sites available. The simulation can be performed with or without additional cash demand. It is completely free and without commitment and the borrower can make his choice according to the result obtained. Once the simulation is completed, an expert will proceed to study the demand and feasibility of the project. When this ends and the additional cash is granted, its payment will be made at the same time as the repurchase of the credits in progress.