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Home loan: how to take advantage of the loan insurance delegation

The French seem to know and understand the value of the annual termination of borrower insurance. If the reform is expensive for the banks, it is however advantageous for the individual who can hope to save up to 10,000 dollars. Our 3 tips to enjoy it.

The principle of annual termination of home loan insurance allows the borrower to revise his contract on each anniversary date to benefit from more extensive guarantees or save money.

Nearly 80% of owners are aware of the mortgage loan insurance delegation

home loans

The study carried out by Magnolia.fr in spring 2018 revealed that 79% of owners knew about the insurance delegation, while a previous survey dating from November 2017 indicated that only a third of these same owners were aware of this opportunity. You should know that on January 12, 2018, the Bourquin amendment was validated by the Constitutional Council and the media coverage of the subject allowed the insurance delegation to be known to a wide audience. Indeed, the Magnolia poll states that 78% of those polled learned about the possibility of termination through the media, 16% through word of mouth and 6% through their banker.

It is not certain, however, that the French will make massive use of this practice because among those who know the loan insurance delegation, more than half of the people questioned declare that they do not know how to do it. And almost 20% of French people still ignore this possibility. Result: in 2019, “85% of the market is still monopolized by the banks, leaving only 15% to non-subsidiary insurance of banking groups” underlines Magnolia who indicates that it will take many more years before this becomes a reflex.

The borrower insurance delegation saves up to 10,000 dollars on its credit

The implementation of the Bourquin law offers more freedom to borrowers. Indeed, the latter can negotiate and change mortgage insurance every year, on the anniversary date of their contract, by playing the competition. Several brokers estimate that by taking out individual loan insurance, borrowers can hope to save up to 10,000 dollars.

The only downside: the difficulty for individuals to identify the anniversary date of their insurance contract. Bourquin law clarified the situation by fixing the anniversary date of the signing of the loan offer by the borrower as the sole maturity date. But the borrower can also choose another date appearing on his insurance contract. In this case, this new definition of the due date must clearly appear on the notice given by the lender to the borrower. But the Bourquin law goes further still: it indeed reinforces the system of information of the borrower of his right of termination and of the deadlines which he must respect to make use of it. And if the insurer fails to fulfill its information obligations, the sanctions are also reinforced. Finally, the Bourquin law also provides that insurers who refuse a request for substitution of insurance presented by a borrower must imperatively communicate to the borrower all the reasons for refusal and specify, if necessary, the documents missing which would allow his request to be accepted. Harmonization and simplification which made it possible to clarify the situation and limit the delaying tactics of the banks, which were based on the vagueness surrounding the date on which the insurer could take out a new contract to refuse requests for delegation of insurance .

Termination mortgage insurance: a reform that costs the banks dear

Termination mortgage insurance: a reform that costs the banks dear

Banks are the first to be impacted by the principle of annual termination of borrower insurance. In three months, during 2018, they saw a large number of policyholders seduced by the attractive prices offered by certain insurers. The founder of the loan insurance broker “Réassurez-moi”, Antonette Lucard, says that nearly 300 million dollars in insurance contracts have been withdrawn from banks and renegotiated with other insurers.

3 tips to take advantage of the loan insurance delegation

3 tips to take advantage of the loan insurance delegation

Thanks to the insurance delegation, the borrower can save several thousand dollars on the total cost of his mortgage. But how can you take advantage of this new measure?

Use a mortgage loan comparator dedicated to your profile

By using a free and non-binding online comparator, borrowers will be able to find an offer suited to their profile and at a lower price. These easy to use tools take into account your situation, your needs but also your budget.

Choose a borrower insurance with equivalent guarantees

To make the right choice among the offers offered, you must ensure that the guarantees between the group contract taken out with your bank and the desired insurance contract are at least equivalent. Indeed, this is a sine qua non condition for your delegation of insurance to be accepted.

Use the standardized information sheet (FSI) before any new insurance contract

Before taking out a new insurance contract, take the time to compare using the ISP. This document must be given to individuals who receive a loan offer. The standardized information sheet details all the guarantees contained in the loan insurance offer issued by the bank.

If customers can hope to make substantial savings through the annual termination of borrower insurance, individuals also have the option of adjusting their rates to be better insured. To change insurance, the individual can carry out the procedures himself but also be accompanied by a broker.

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Business

Credit for secondary businesses

Anyone who needs a loan for a secondary business is usually still in a permanent employment relationship, which is based on either a part-time or full-time contract. The higher the earnings in regular employment, the better the chances of getting a loan to finance acquisitions for the secondary trade.

Anyone who needs a loan for a secondary business needs a business plan

Should the secondary trade become the main source of income in the near future, the financing bank needs the same documents as for a loan that is used to start up a business. The documents include the business plan, a profit forecast for the first year or the following years as well as a complete cost statement of the required inventory. If goods, vehicles or machines are purchased to set up a company, these can be used by the bank to secure loans. Depending on the amount to be financed, it may be necessary for the borrower to name guarantors or to secure the loan for an ancillary business with property, such as real estate.

The state also supports loans for setting up a business

In many cases, founders of secondary businesses receive low-interest loans from the Lite Lender, LL for short. However, the amount of these loans differs because they are granted according to different criteria. Lite Lender divides the projects into programs that have different loan amounts, terms and interest rates. Depending on the project, the requested loan amounts can be paid out in whole or in part on request.

In order to receive a start-up grant, it is important to apply for it before the first investment is made. The borrower incurs no processing costs for most Lite Lender loans. The amount of the repayment amounts depends on the amount of the loan applied for. After the first payment, the loans are, depending on the purpose, free of interest and principal in the first few years.

A seminar can be very helpful for start-ups

A seminar can be very helpful for start-ups

In order not to have to refinance, it is advisable to get professional help. Before starting a business and before applying for a loan for a secondary business, you should either attend a coaching session at Lite Lender or inquire at the local adult education center whether a seminar for start-ups is offered. Here too, the founders are provided with a lot of information that simplifies the application for a loan for a secondary business.