Credit buy-back and unemployment: is it possible?
Developing a job seeker request is not easy, but it is a good way to rebalance your budget. Update on the possibilities of buying back credit and unemployment.
The interest of a credit redemption
Why apply for a buy back credit when you are unemployed? When the plaintiff obtained his mortgage and car loan, for example, he had regular income. The loss of employment no longer makes it possible to repay the loans contracted during the previous situation. Also, a credit redemption makes it possible to group all these credits with one goal: to reduce the monthly payments.
This objective can only be achieved by lengthening the overall repayment period of the loan (s). Certainly, over the long term, this solution is not necessarily advantageous, because the interest rate could be less competitive.
However, if credits have been contracted for several years, falling interest rates could offset this effect. In the end, the advantage lies in the fact of being able to limit its monthly payments. This is why the redemption of credit for the unemployed is very interesting.
The point of view of the bank
If credit and unemployment redemption seems like an excellent solution for borrowers, the bank does not always see it the same way. In theory, she agrees with the idea of limiting monthly payments, but will not, in practice, always be ready to follow borrowers whose incomes have fallen significantly. It should be noted that unemployment benefits are not taken into account in income when calculating the debt ratio.
The bank will therefore be likely to grant a credit buy-back to a job seeker only if the co-borrower of the unemployed person enjoys a stable job with sufficient income not to exceed the debt ratio of 33 %.
In the event of a job loss, there is an alternative to buying back credit and unemployment: the postponement of deadlines. If this option is included in the loan agreement, the borrower can request this postponement to interrupt the repayment of the monthly payments for several months, the time to find a job.
The redemption of credit job seeker is also possible in the case where the borrower is real estate owner and agrees to mortgage his home. The bank then has a guarantee if the borrower does not respect its commitments.