Determine the credit repurchase rate

 

The repurchase of credit can report to the mortgage, but also to consumer credits. When a borrower has several consumer loans and wants to reduce his monthly payments or finance new projects, he can request a loan repurchase. A lender then collects all of the credits into one by re-determining the rate, monthly payments and duration of the loan.

Redemption of credit: The APR

Redemption of credit: The APR

When we talk about the rate of a loan, we must not only look at the interest rate on the amount borrowed. It is also necessary to take into account the additional costs and the administrative costs. At the time of the repurchase of its credit, the borrower must be interested in the Annual Effective Annual Rate (APR) which takes into account all these parameters. This is the reference rate for assessing the profitability of the loan buy-back.

Redemption of credit: Market News

Redemption of credit: Market News

Interest rates change and can vary greatly depending on the activity of the financial market. To determine your redemption rate, you must therefore stay informed of current interest rates and take advantage of a drop, if this is the case for example.

Redemption of credit: current credits

Redemption of credit: current credits

The repurchase rate of credit finally depends on the credits concerned. You have to take into account the interest rates of these credits and make sure that the redemption rate is lower than the previous ones. It is also important to look at the remaining duration of the credits. If the borrower has already repaid a large part of his credit, he must negotiate a shorter credit repurchase.

For example, for a credit provided on 60 monthly payments, of which 36 monthly payments have already been paid, the credit repurchase rate is determined over a period of 24 months and more than 60 as at the start. Interest rates can then be more attractive. The remaining term can also be redefined and extended to allow lower monthly payments.

A repurchase agreement (RP) is a short-term loan where both parties agree to the sale and future repurchase of assets within a specified contract period. The seller sells a Treasury bill or other government security with a promise to buy it back at a specific date and at a price that includes an interest payment.

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