Do you want to set up a credit redemption? Find out what guarantees are required by the bank.
Whether or not collateral is required depends on the type of repurchase of the credit being considered, the duration of the credit, and the level of indebtedness of the borrower. Logically, the more complex the credit buyback file (presence of numerous credits, rejection of withdrawals, frequent bank overdrafts …), the more the bank will tend to claim one or more guarantees. Explanations.
Credit redemption: in which cases can the bank apply for collateral?
To issue an offer to buy consumer and / or real estate, the lender can ask for guarantees to be protected in case of payment incidents. The level of guarantee requirement of the financial institution depends in particular on the nature and amount of the operation, the number of loans concerned. The profile of the borrower, his personal, professional and patrimonial situation, are also taken into account.
Not all borrowers can provide equivalent guarantees. For example, a tenant can not mortgage his property unlike a homeowner. Before making a loan consolidation, it is important to know what guarantees are likely to be claimed by the bank, regardless of your profile.
The list of guarantees requested by the bank for a credit redemption
Following a request for repurchase of credit, the lender is entitled to claim several guarantees:
A mortgage guarantee
Mortgage guarantees include the mortgage and the lender’s lien (PPD).
The mortgage is reserved for the owners. This is a right granted to the financial institution as security for the payment of a debt. In the event of payment incidents, the lender may seize the property and sell it at auction in order to recover the outstanding capital and interest. It should be known that the repurchase of mortgage with mortgage guarantee implies a compulsory passage in front of a notary.
Less expensive than the mortgage, the PPD allows the bank to take precedence over the guarantees taken on the property. If it is seized and offered for sale, the lender holding this privilege may be compensated in priority. This solution is however limited since it can only be used to guarantee an already built property.
The borrower can also use the deposit to guarantee his credit redemption. We speak of a joint surety when the guarantor is a natural person. In the event of default in repayment, the bank may then require the surety to pay a due date on the same basis as the borrower.
The guarantor may be a legal person in the form of a mutual guarantee company. In return for a commission generally between 2 and 3% of the repurchase of credit, this company agrees to pay the debts in case of default.
The collateral is a contract binding the debtor and its creditor. The debtor gives the creditor something to secure the loan, such as a life insurance policy, a term account or a vehicle. The pledged sum is then blocked for the duration of the credit redemption. If the borrower does not honor his financial commitments, the lender will repay himself by recovering the money placed on these savings products or by selling the pledged property.
The assignment on salary
The bank may require a pay assignment to ensure payment of the monthly installments. In this case, the monthly payments will be directly deducted from the borrower’s salary without his employer knowing the reason. This solution is strictly regulated by law.
Loan insurance is almost always claimed by the credit institution. It covers both the bank and the subscriber in the event of death, disability, illness or even loss of employment. In the context of the repurchase of credit, its cost is far from negligible.