Loan Consolidation Guide

We explain to you the different stages of the loan consolidation process, the different types of loan consolidation, its benefits and its cost.

What is the purpose of the consolidation of loans?

The consolidation of loans allows to group in one line of loan all of its loans, whether they are for real estate or consumption. It can also integrate a bank overdraft, debts or receivables and a cash envelope to carry out a project. The objective is to make a new loan with a single rate, the duration of which will make it possible to obtain a monthly payment adapted to the repayment capacities of the borrower. This loan replaces all old consumer loans and simplifies the borrower’s budget management.


Loan consolidation Guide: Types of Projects Funded

As with any type of consumer loan or real estate loan, the consolidation of loans exists in different forms and is possible for different types of projects. The purpose of a loan consolidation being to make a new loan, with a clean rate and monthly payments, therefore, this new loan could very well be a simple consumer loan, a mortgage and loan conso ( in order to consolidate the debts at the same time as to finance the purchase of a real estate), a loan to have a cash envelope, etc …

The possible types of projects with a consolidation of loans are:

  • Purchase of real estate loans
  • Purchase of consumer loan
  • Purchase of real estate and consumer loans
  • Purchase of loans and request for cash
  • Purchase of loans and consolidation of debts
  • consolidation of loans and loan work

Each of these loan buy-backs therefore have their specificities, as well as their own conditions and criteria. Learn more about the types of loan consolidation .

What are the steps of a loan consolidation?

The consolidation of loans follows strict implementation rules. The financial package is more complex than for a simple consumer loan or a mortgage loan. But a consolidation of loans is also prepared before the financing plan. Learn more about the steps of a loan consolidation .

loan consolidation: for which types of profiles?

Whether you are on a fixed-term contract, a liberal professional or retired, there are solutions for the purchase of loans. The setting up of the file of the financing and the file of repurchase of loans will be subjected to certain different criteria according to your professional situation. Learn more about the purchase of loans according to the professional situation .

The cost of a loan consolidation

The cost of buying back loans is subject to different variables and different criteria for granting. These different types of fees may also vary depending on the total amount of the loan (s) to be redeemed and depending on the nature of the new transaction. Learn more about the cost of buying back loans .

The benefits of buying back loans

The consolidation of loans has several advantages: a single monthly payment, recovered cash, avoid a situation of over-indebtedness, enjoy more attractive rates, etc … So many benefits for the financial well-being of your household. Learn more about the benefits of buying back loans .

What are the documents to provide for a purchase of loans?

As with any financing file, various documents must be collected for a purchase of loans. And all of these supporting documents may be different depending on the type of purchase of loans. In addition, if there are two borrowers when buying loans, it will be necessary to provide the documents for each of them. Learn more about supporting documents for a buy back of loans .

Distinctions of the consolidation of loans

Depending on the nature of the loans to be consolidated, the consolidation of loans can be divided into two broad categories.

  • Consolidation of consumer loans : It is intended for the purchase of consumer loans, revolving loans, debts or receivables, overdrafts and a cash envelope.
  • Consolidation of real estate loans and consumer loans : it is intended for the purchase of one or more real estate loans and may include consumer loans, revolving loans, overdrafts, debts or receivables and a cash flow envelope.

Depending on the category in which the borrower is located, the loans granted may vary in amount, duration and guarantee.

The most frequently asked questions

In terms of consolidation of loans, many questions may arise, other than on its operation or its cost. The Central Financing Office gives you its answers to the most frequently asked questions about the purchase of loans:

After buying back loans, can I take out new loans?

It is entirely possible to subscribe or not to new loans, but you must first check your ability to repay and, if necessary, seek the advice of professionals such as La Centrale de Financement.

What is the age limit for a loan surrender?

loan consolidation has no specific age limit and depends on the lending institutions. In general, the repurchase of loan can be carried out until 75 years. In the case of financing senior profiles, the end date of the contract will also be taken into account, around 85 years maximum.

What is the maximum duration for a loan consolidation?

The maximum duration for the consolidation of loans depends on the type of consolidation. In the context of a consolidation of consumer loan, the maximum duration is 12 years. In the case of secured loans, the repurchase may be up to 25 years and 35 years for a mortgage loan repurchase (within the maximum age limit of the end of the loan).

What is the withdrawal period for a loan surrender?

When the borrower receives the loan offers as part of a mortgage repurchase (minimum of 60% real estate loan in the repurchase of loan), it is protected by the Scrivener law. This means that the loan offers must be returned no earlier than 10 days after receipt, to allow time for reflection to the borrower. If the borrower decides to retract he will owe no fees to the institution. In case the lending institution has already made money available to the borrower before the end of the withdrawal period, the borrower will have to repay them within 30 days with the interest due. When the offer to buy loans is accepted, the borrower has a withdrawal period of 10 days for repurchases of real estate loans and 14 days for the purchase of consumer loans.

Be careful not to confuse the consolidation of loans with   renegotiation of home loan . The first aims to consolidate several loans to control a debt ratio become too high, the second aims to take advantage of preferential rates by reducing the duration of a single mortgage.

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