By definition, the repurchase of credit is a financial transaction that consists in uniting all outstanding credits into one. Solutions differ from one institution to another. It is therefore your responsibility to inform you before you commit. When a credit buyback file is accepted, is it necessary to purchase insurance ? If you ask this question, this article is for you!
The redemption of credits in a few words
The repurchase of credit is a loan that must be repaid. The repayment term will be defined in the loan offer. You have the choice of duration. The latter is variable; it can be concluded for 6 months as it can be concluded over twenty years. It should be noted that people who use credit redemption are indebted applicants who seek to reduce budgets while finding a suitable purchasing power. However, no one is able to predict the future just as no one is immune to an accident of life. It is in this specific context that the borrower insurance can be very useful.
What is the point of an insurance?
When a consumer wants to invest in stone, he usually uses a home loan. For the loan agreement, the credit or banking companies invite the subscriber to contract a so-called borrower insurance. This insurance makes it possible to insure the backs in the event of imponderables ( dismissal, death, disability… ). It is also a guarantee for lending institutions. Indeed, in case of payment problem, the insurance takes over either by shifting the monthly payments or by repaying the entire remaining balance due.
For information only, the Hamon law allows the borrower to choose his insurer. Thus, it is possible to find the best insurance borrower for his mortgage at the best price. Choose between security and carelessness; it’s only a question of responsibility!
But what is the interest in this insurance when buying a loan? Here is a question that deserves a response in complete transparency. The borrower insurance underwritten under a credit redemption offers you many guarantees :
- It covers job loss.
- It covers the accidents of life ( disability as death ).
- It covers in case of temporary incapacity for work.
In fact, insurance is a serious asset because it serves as a relay in case of problems to honor the repayment of a loan, even if you have a co-borrower !
Is it mandatory to take out this type of contract?
Currently, there is no law requiring subscribers to subscribe to borrower insurance. You are totally free to make your choice. It is, therefore, an optional insurance which is subscribed by the responsible underwriters. The borrower insurance can really be of great use.
To give you a concrete case, if you come to die, you do not leave the heavy burden to your home to pay back your bills since insurance will take care of paying your current credit. The loss of a loved one is a sufficiently painful ordeal just like disability. That’s why it is sometimes good to protect your loved ones by subscribing to a borrower insurance.