Should we change banks in the event of loan redemption?


If you are evaluating the possibility of using the loan buy-back to restructure your outstanding debts, you are probably wondering about the consequences on the daily management of your accounts.

Does buying back your credits to consolidate them into a single one mean changing banks? No. Using loan consolidation is a restructuring of your credits, and does not require you to move your accounts to a new establishment. You can continue to benefit freely from your current account but also from your various savings products in the bank of your choice.

No need to switch accounts

No need to switch accounts

When you redeem credits, all of your loans are consolidated into one. In reality, the credits you previously had have been settled by the banking organization that gives you your new credit. By “redeeming” your loans, it has settled your debts with your old creditors, and therefore offers you new credit. It is to him that you must make the reimbursement of your monthly payments now. So you no longer have a multiplicity of interlocutors, but a single creditor. This new loan does not in any way oblige you to change the domiciliation of your bank accounts.

Once the transaction is validated and implemented, you will simply have to authorize a monthly withdrawal from your checking account to honor your new loan. No need to open a new checking account elsewhere, or even to communicate a new RIB to your employer or to official bodies. Besides, your current bank details will be requested from the different documents to constitute your file. However, if you want to take this opportunity to change banks, you have every right to do so.

Credit does not transfer

Credit does not transfer

In order to fully understand how it works, know that a credit can never be transferred. It is possible to have a loan redeemed by a new bank, but never to transfer it. This must first be reimbursed (in this case by the new establishment). In the case where consolidation is carried out credit by credit, on a case-by-case basis, then it is necessary to change the bank if the establishment carrying out the operation so requires. Let’s take as an example

If you have a current loan in bank A, and you decide to transfer your accounts to bank B, two solutions are available to you. Either bank B agrees to redeem your credit, and thus offers you a new contract (new rate, new term and new monthly payment). Either you transfer your accounts to bank B, but the bank does not take back your credit, or you do not wish to send it. You will then have to keep an account in bank A to honor the loan repayment. The downside is that you will then have to pay bank charges in both banks.

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