Contrary to popular belief, an official is not immune to significant debt, quite the contrary. Due to its stable financial situation, it is more frequently subject to particularly attractive credit offers by credit institutions. This sustained solicitation can thus gradually lead to significant debt. Thus, its financial situation can quickly be altered and repayment of its deadlines becomes either uncomfortable or really problematic. The purchase of credits is then a solution to consider because it will pay only one monthly payment, the amount can be adjusted downward, provided to extend the repayment period. This financial operation is all the more interesting for civil servants because they enjoy certain advantages due to their status.
The redemption of official credits: some basic notions
Banks and credit institutions generally consider the employee as having an ideal profile. Why ? Simply because he is an employee of the state, which gives him security as well as the stability of his job, and therefore a lower risk for the organization that gives credit. The criterion of the professional situation of a borrower has always been paramount at the time of a credit application, the official is thus housed with the good sign. Thus, organizations specializing in the redemption of credits have specially adapted their offers to this type of profile, in particular to optimize the budget of these borrowers of the public service.
The repurchase of official credits does not differ from the classic repurchase of credits. It consists of a financial package designed to reduce the total maturity of the various loans in progress. How? This is to bring them together in one new loan, which means a single monthly payment to repay. The specificity of this banking approach is to extend the repayment period, but also to lower the interest rate. As for the credits to be bought back, they can be just as much consumer credits (work, car, staff personal loan, revolving credit, etc.) as real estate loans.
The benefits are many and especially the personal finances are again balanced. A lighter monthly payment, a single lender to manage, more margin for daily expenses and finally a saving capacity found, the list has good assets. In terms of its operation, the redemption of official credits is identical to other redemption operations. It is the lending institution that will manage the repayment of all the remaining capital due from the credits to be settled. The borrower official meanwhile will have only one monthly payment to repay through a new single credit agreement. It has been adapted to its needs and its ability to repay, with a credit duration carefully determined.
The interest rate charged by banks and credit institutions does not depend on the employment situation alone. Other criteria such as financial stability, the remainder of the household, the debt ratio will be considered before any interest rate proposal for the new credit. While it is true that being employed by the state is an asset with financial institutions, it is important not to hesitate to use competition because each organization has offers more or less attractive.
In terms of the repayment period, the redemption of credits is framed by precise rules. It can not exceed 12 years for a purchase of consumer credit. In the case of a repurchase with guaranteed loan, the duration can be up to 25 years. For a mortgage purchase with a mortgage on a property, the repayment period can even reach 35 years.
It should be noted that the credit transfer operation is the same regardless of the status of the staff member, whether he is a tenant, owner, accommodated free of charge or with official accommodation.
What specificities for civil servants?
The steps to be taken for a repurchase of appropriations civil servant are identical to the other requests. The future borrower can initially simulate online and then be put in contact with one or more organizations. Most of them have special offers for civil servants and it is a specialist advisor who will certainly take charge. It will of course be necessary to provide a complete file with all the supporting documents as to the identity, the family and professional situation, the banking situation and of course the current loans and debts. The stronger this is, the greater the chances of getting a positive response.
The specificity of the official borrower is that he has an additional guarantee that is the security of his job. Of course, he will have to provide a personal bond, even real estate, but the stability of his job can greatly play in his favor when a file of repurchase of credits.
Apart from this exceptional status, being a government borrower provides other benefits, such as credit insurance and a favorable bond. For the latter, when the civil service agent adheres to a professional mutual and he plans to include a home loan in its purchase of credits, he can use it as a home equity surety. He will thus be able to avoid putting his real estate in mortgage to ensure a possible incident of payment during the repayment period of the credit. It is therefore the mutual which will take care of the expenses of guarantee.
As for the borrower insurance, it can be subscribed at a preferential rate, always provided that the employee is affiliated with a mutual of the civil service.
A redemption of credits with or without mortgage?
In certain cases, the repurchase transaction is subject to the obligation to make a mortgage. This means that the borrower has to bring his property as collateral, thus giving the lending agency security in the event of non-payment of its credit maturities. This mortgage of a property concerns mainly the purchase of mortgages, that is to say that these represent more than 60% of the amount of capital remaining due. As a reminder, otherwise, the redemption will be considered as a consolidation of consumer credit, for which no mortgage is requested.
The employee is not immune from this option when applying for loan consolidation. His job and his income giving him more security, he can possibly avoid the mortgage. In the end, this will depend solely on the criteria of the chosen credit buy-back organization. Prove that a file presents no risk and on the other hand that all the conditions necessary for the acceptance of the application are met, represent assets that can prevent a mortgage. One of the most important parameters for this is to present a debt ratio but also a perfectly reasonable living remains.
The repurchase of loans without mortgage mainly concerns the recovery of consumer loans, revolving loans, and also bank overdrafts and other debts. In this case, only these types of credits will be affected by the funding. Real estate credit can be included in the loan-only pool only when the amount remaining to be repaid is a smaller share of the total amount. These criteria must, of course, meet the requirements of credit institutions.