Mortgage loan, pawnshop, credit consolidation, repurchase sale… there is a cascade of financial products that allows a household (or a single consumer) out of the “red” while recovering purchasing power. Do you know the redemption of loans between individuals ? This financial solution is very recent and comes straight from our American neighbors. What does this financial operation consist of? Is it legal? Where to make this request? This post is focused on this new concept which is becoming more and more important on the French territory.
The purchase of loans between individuals: understand this idea
Making a grouping of credits with individuals may seem “weird”. And yet this new way of financing is very real. The principle is simple: an individual lends a certain amount of money to an individual in need without involving financial institutions.
Why such a concept? It must be realistic, more and more French households have financial difficulties, even if both people work. The reasons for this empty passage are numerous:
- Life events that have not been anticipated ( accident, disability, divorce, child studies, dismissal… ).
- Bad management of his budget.
- Excessive consumption of consumer credit for the financing of movable property or personal projects.
- Compulsive or unnecessary shopping.
Whatever the reason, we have to find a situation so that the financial balance is stable again and the cash becomes positive again. It is to help the indebted consumer that the purchase of credits is born. This concept offers the advantage of collecting consumer credit in a single credit (some banks allow the consolidation of real estate loans with consumer loans).
Unfortunately, another observation is regrettable. Financial institutions are strict and do not easily grant credit redemption. This is the case, for example, when an interested party is registered in the Banque de France or if the person concerned is an interim employee who has no guarantor.
If financial institutions do not support the indebted consumers, who can help them? Playing on solidarity between individuals is a possible solution.
How does the purchase of loans between individuals work?
How does this process work? The repurchase of credits (also called non-bank loan ) proposed by the individuals works on the same principle as the proposals made by the banks with some differences:
- Sign a debt acknowledgment. Debt recognition is a document that certifies that one person has lent money to another. This writing, which is signed by both parties, recalls the amount of the loan, the terms of repayment and the duration (the individual can add interest). This document must be filed with the Taxation Services Registry to obtain a legal value. There are fees to pay (less than 150 $).
- Justify of his identity. The individual lender is entitled to know the identity of the borrower. In fact, he is asked to provide a copy of his identity card or passport.
- Justify of his home. The file is completed by a recent proof of residence (less than three months).
Internet is the way to get in touch with a particular lender (be wary of scams ). However, it should be noted that a buyback of loans between individuals is usually done with a relative.
Is this offer of grouping loans between individuals really advantageous? This solution can be a good product if the amount of credits to be sold is minimal. It should be noted that, generally, the individual who lends the money sets a limited duration (less than 5 years).