Credit consolidation: it’s time to take advantage!

An average rate of 1.85% over fifteen years, or 0.4 points less than in 2015: this is how much it is today possible to restructure your various debts (mortgage, consumer, revolving, etc.), To end up with a single loan , with a lower monthly payment than the previous ones added up. “This rate is certainly higher than that of a mortgage for the same duration, but this drop constitutes an opportunity, and has enabled profiles, which have not passed so far, to find financing,” explains Armin Messin, president and founder of Lite Lender .

 

Average Credit

Average Credit

For proof, the number of files processed by this specialized broker increased by 16% between 2015 and 2016. According to the company, borrowers using this technique buy on average 4 credits, for an amount of approximately 61,000 dollars. Primarily, refinanced consumer loans amount to 32,700 dollars on average. Once concluded, the operation reduces the debt ratio from 46.7 to 31.2% of revenues, the limit usually tolerated by banks. Among couples who use it, the monthly payment due increases to 686 dollars, against a total of 1,242 dollars previously. This allows their “remainder to live” to climb from 2,072 to 2,624 dollars per month.

However, it should be remembered that this gain in purchasing power, of around 30%, is never free: a credit consolidation operation in fact leads, in general, to an extension of the loan period … and therefore, in the end, to increase the total cost of interest.

“The grouping is more and more used for questions of comfort, like a financial technique allowing to consolidate its debts before embarking on a new project, assures however Armin Messin. Even if we are of course always requested by borrowers experiencing life accidents, such divorce them. “

 

Proof that households using it are not necessarily in financial difficulty

credit consolidation

The share of groups comprising at least one revolving credit, increased from 88.6% in 2014 to 61% in 2016. As for the proportion of files having a bank overdraft, it declined at the same time from 47 to 32%. However, not everyone can apply for this kind of funding. Farmers are thus completely absent from the clientele analyzed by Lite Lender, while traders and craftsmen weigh barely 1% of the files. And the CDD or temporary workers who benefit from it can, most often, only because they are in a relationship with a person working on a CDI.