Credit renegotiation



You took out several credits a few years ago: consumer credit, mortgage, project credit, etc.
With falling credit rates, you can request a renegotiation of your loans.
However, you will be asked as many questions: how to renegotiate your credits? Which address ? What are the pitfalls to avoid?

Principle of credit renegotiation

Principle of credit renegotiation

Credit renegotiation is a loan review request made by people who have already taken out several fixed rate loans

Renegotiating a loan consists in paying off an existing loan and replacing it with a new loan, at a lower rate, with the same banking establishment.
If this operation is carried out with another banking establishment, it is then a credit repurchase, followed by the establishment of a new loan with a new guarantee.

The Cogilaw Company regulated the renegotiation of the loan, in fact, it provided for early repayment penalties and fixed a maximum amount. Thus the banks receive a remuneration in the case where the credit is replaced by a credit in another bank.

How to renegotiate credit?

To renegotiate your loan, you can either contact your bank where you took out your loans, or other banking establishments.

But which of its 2 possibilities is recommended?

Loan renegotiation with your bank

Loan renegotiation with your bank

Renegotiating your loan with your bank will save you time and energy, while saving you the hassle that results from changing a bank such as setting up new direct debits, changing your bank address, etc.

However, this solution is so difficult because often banks refuse requests for renegotiation of credit since nothing obliges them to review the conditions of old loans. But, in the face of fierce competition from credit institutions, there is a good chance that he will listen to you. So first start trying your loan renegotiation with your bank, asking the following:

β€œOn the date of the day and given the significant drop in rates, I ask you to consider a reorganization of my loan to reduce the rate, what are the terms?”

Before any proposal, the banker will carefully review your file and study your financial situation, since you started taking out loans, he will check if you have any payment incidents, and the evolution of your salary

Costs incurred during renegotiation with the lending institution

Costs incurred during renegotiation with the lending institution

Penalty for early repayment: they are calculated in addition to the principal remaining due (CRD) of your loan on a given date. The Cogilaw Company limits them to a legal maximum of 3%. The clause may also be indicated: 6 months of interest with a maximum of 3%. These fees are normally negotiable.

Fees for the new loan: Two types of calculation may be present either a fixed rate linked to an endorsement (in principle 120 $) or a percentage of the amount of the CRD (in principle 1% max. 500 $)

Loan renegotiation with other credit institutions: Credit repurchase

Unlike your bank, credit institutions will welcome you with open arms as a new customer, however, this solution is much more expensive and leads in return:

Integration of costs:

Payment penalties: These are calculated in addition to the principal owed (CRD) of your loan on a given date. The Cogilaw Company limits them to a legal maximum of 3% You must pay prepayment penalties to your bank: 3% of the borrowed capital, capped at six months of interest

Guarantees: it will then be necessary to constitute a new guarantee on the property. Depending on the nature of this (mortgage, mutual guarantee), it is necessary to count between 0.6% and 2% of the amount to be refinanced.

Administrative costs: finally, the new establishment will invoice administrative costs, up to 1% of the amount borrowed, which can be negotiated.
In total, all of these costs may amount to 6% of the capital.