The repurchase of credit is a transaction from which a banking institution buys your various credits and groups them together. Thus, instead of having to make several payments to different creditors, you only have one credit to pay regularly. On the other hand, the repurchase of credit allows you to reduce your monthly payments. Indeed, with the redemption, either the duration of your repayments is lengthened, or the overall rate of your new credit is lower than the average rate of your previous credits. Moreover, thanks to the purchase of credit, your debt ratio will also be reduced.
By redeeming credit, you may want to cancel or change credit insurance. This is entirely possible because, since 2010, the Lagarde law authorizes this operation. However, there are certain rules to respect depending on the institution concerned.
In some cases, any cancellation will only be possible on the anniversary of the first insurance contract. In addition, the coverage of the new insurance must be equal to or greater than that of the old one. Otherwise, your initial insurance may refuse to subscribe to your cancellation. Once all these conditions are met, you can change your insurance by contacting a banker or a broker.
A borrower who wants to change or terminate his insurance contract has twelve months, from the moment he signed his loan offer, to do so. At the latest fifteen days before the twelve months are completed, the request for termination of contract must be sent to the former insurer by registered letter accompanied by an acknowledgment of receipt. In the same mail, the borrower must submit a new insurance contract and mention his wish to terminate. The borrower must then be careful that the date of termination of the old contract corresponds to the date on which he will subscribe to the new one.
Once the termination letter has been received, the lending institution must accept the termination decision. This will be pronounced ten days after an agreement established between the lending institution and the new insurer. If there is disagreement, the borrower may challenge the decision of the lending institution and require that it provide a valid reason for its refusal. If the lending institution can not explain its rejection of the request for termination, it may fall foul of the law for not having complied with it. He will then receive a financial penalty.