Inspired by the FED, the Early Commerce Bank has set up since January 2015 a massive buyout plan for private and public debts . These lowered key rates ultimately allow to influence 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 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 mortgage repurchase.
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 consume more.
As a result, consumption consumes more growth, and the state thus receives more revenue that de facto reduces budget deficits.
The effect on the euro, at the same time the lowering of interest rates induces a depreciation of the euro against other currencies making it more competitive export. 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 is 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 real estate.
For the offer of consumer credit, it is more interesting for term purchases because the costs of these Learments will be very low, and it will be more interesting than using money to invest in the plans. saving.
Regarding 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 amount of its monthly payments.
Credit Renegotiation Broker’s Council
The companies specializing in brokerage for credit buy-back 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 specialist of brokerage, allows a real competition of the credit houses with a qualitative result optimal 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 terms of volume and 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 hand-over 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.