Inspired by the FED, the European Central Bank has set up since January 2015 a massive buyout plan for private and public debts. These lowered key rates ultimately allow influencing the rates that banks give to businesses and individuals.
By doing so, the ECB has created great opportunities for people who would like to renegotiate their loans or investments in rental yields.
The lowering of the policy rate
The downward readjustment over a year and a half of bank fixed rates makes it possible to consider a renegotiation of bank loans of individuals.
According to many experts, one-third of French households are above the acceptable level of debt (33%).
A situation due in particular to the underwriting of consumer credit, while it would be possible to reduce these levels through the renegotiation of interest rates in the context of a buyback mortgage.
This reduction in key rates will, therefore, have several consequences:
The effect on growth is that the fall in interest rates, therefore, affects the cost of liquidity granted by banks and financial institutions. Mechanically, companies start borrowing again in order to develop their competitiveness, and individuals consumer;more.
This consumption, therefore, redoubles growth and the state thus perceives more revenues which de facto decrease the budget deficits.
The effect on the euro, along with the decline in key interest rates, leads to a depreciation of the euro against other currencies, making it more competitive for exports. This leads to a better competitiveness of companies in the eurozone that increase their exports and who hire more to be able to meet order deadlines.
The consequences for individuals are that they will, therefore, be able to have new opportunities for renegotiating debt. They are of the type to the consumption or of the type of real estate.
For the offer of consumer credit, it is more interesting for purchases at term because;the costs of these financing will be very low, and it will be more interesting than using the money to invest in the plans. saving.
With regard to the mortgage loan, this decline will re-evaluate the outstanding property, and reduce either the number of monthly payments of the said credit or reduce the number of its monthly payments.
Credit Renegotiation Broker’s Council
The companies specializing in brokerage for credit buybacks bring their skills to individuals by offering them a service of intermediary in customized banking operations.
Thanks to their expertise based on the quality charter of the company, intermediaries in banking operations, also known as “broker” undertake to defend in the best interests of the customers they represent also giving greater credibility to the ” borrower profile “has its last when submitting the file to lenders.
The recourse to a professional brokerage specialist allows a real competition of the credit houses with an optimal qualitative result for the customer (s).
It is true that a difference of one percentage point between the initial rate in progress and the renegotiated rate creates substantial savings allowing a decrease in monthly payments both in volume and in value.
Despite the inherent costs of this kind of banking operations such as:
- The amounts of the early repayment allowances which are fees charged by the original lender if the redemption is made by another body
- Mortgage handover fees and the switchover of the latter to the benefit of the new organization
- The fees of the new organization
It should be noted that despite these imperatives most credit redemptions still remain clearly profitable.