A lender is primarily concerned with knowing whether the person requesting a loan consolidation will be able to repay it without difficulty.
Before possibly formulating a loan offer, the establishment studies the loan repurchase file submitted. What elements are carefully scrutinized? What is the procedure ? How to obtain a favorable opinion for your repurchase of credit?
Here are the criteria to look after to check all the boxes and put a maximum chance of success on his side.
The lender begins by concentrating on studying the income of the candidate for credit repurchase. The idea is to make an inventory upstream of the assets and liabilities of the borrower, but also to assess its financial capacity if the credit consolidation operation is approved.
Based on the remaining living , the family quotient and future expenses, the lender determines the benchmark debt ratio . This rate can be set at 33% (standard debt rate), be more restrictive (30%) or more loose (35%).
The evaluation of the rest to live
What is the rest to live for? The remainder corresponds to the amount still available once the fixed costs have been deducted from his income . It is :
- outstanding credit (s),
- pensions paid,
- local taxes,
- income taxes,
- etc …
Depending on the geographic location of the residence, the bank calculates the remainder of living necessary to meet the needs of the household.
Taking into account the family quotient
What is the family quotient ? The family quotient represents the income available to the borrower each year. This element is taken into account in the analysis of the loan repurchase file in substitution or in addition to the remainder to live. The family quotient calculates the ratio between net income excluding borrowing costs and the number of people in the household.
Estimating future expenses
The lender makes a projection in the coming years on the amount of expenses that the borrower will have to face. This is an opportunity to include the charges arising from the request for the consolidation of loans (including the costs of the repurchase of credit) but also the major purchases to come such as the acquisition of a car or the carrying out of works habitat.
What are the charges retained?
The charges used to calculate your debt ratio are as follows:
- the rent for the main residence;
- the monthly payments of credits kept at the expense of the subscriber;
- amounts paid as part of support payments and compensatory benefits;
- repayments of personal debts.
How to obtain a favorable opinion for a repurchase of credit?
The lending organization has a scale , each borrower being awarded a note. This scoring system compiles several qualitative criteria which complete the study of more quantitative income.
The bank thus refines its assessment of the level of risk to give an opinion favorable to the repurchase of credit (high score) or to refuse to make a financing proposal (low score).
A rating monitors the quality of your credit repurchase file
Scoring allows lending institutions to more precisely determine their requirements for taking collateral. A repurchase of credit with a difficult file can involve the obligation of a mortgage, whereas a more qualitative file will require only a mutual guarantee.
If each bank has its own reading grid, the following criteria participate in the development of scoring, in particular for loan repurchase files including a mortgage:
- the age of the borrower;
- the stability of the professional (nature of the employment contract, seniority, etc.) and family situation (divorce, dependent children, etc.);
- the duration of the loan.
The priority elements to have a favorable response to a loan buyout
To obtain a favorable opinion for a grouping of loans, it is necessary to optimize the elements of the preceding scoring, in particular:
- be between 25 and 50 years old;
- have been employed for several years;
- have a stable family situation for the duration of the loan;
- present a personal contribution between 10% and 30% of the amount of the credit buy-back;
- target a duration of the loan between 15 and 20 years.
Without being exhaustive, other indices are studied such as:
- the rest to live;
- the number of dependents;
- indebtedness before and after the consolidation of loans;
- the number and nature of the credits to be grouped;
- any payment incidents (bank overdrafts, delays or defaults, check issued but not funded, etc.);
- risky behaviors such as gambling debts and compulsive shopping.
Please note that the favorable opinion has no legal value
The favorable opinion of a credit repurchase file corresponds in reality only to a feasibility opinion. Its receipt records the end of the first stage, the borrower being then informed of his eligibility. The document provided has no legal value and does not bind the subscriber or the lending institution. It is the prelude to the real contract once the mutual consent between the parties is ratified.
When sending the credit redemption request file, no supporting document is requested. It is only when the favorable opinion is given and the procedure continues, that a list of documents to be transmitted is imposed. If the credit consolidation file is complete, the appraisal can then begin. It is important that no documents are missing so that the processing times for the credit repurchase file are as short as possible.
Its study leads to the bank’s decision, which then contacts the beneficiary to inform them of their offer or their refusal to make a commercial proposal.