Granted by lenders who have an agreement or an agreement with the State, the loans can finance up to the totality of a real estate project (purchase, construction, renovation). However, if these credits can be repurchased, what are the conditions to know before you buy back your loan?
The main loans helped: the characteristics and the assets
Intended to promote homeownership, the loans are financially attractive. They are granted under certain conditions which are peculiar to each one of them. In France, there are four main types of state-assisted loans: the Zero Rate Loan (PTZ), the Social Accession Loan (PAS), the Convention Loan (PC) and the Housing Equity Loan (PAL). PTZ: Considered as a personal contribution, the advantage of this type of assisted loan lies mainly in its interest rate which is zero, but also in its terms of repayment. This loan is reserved solely for the acquisition, renovation or construction of a principal residence.
PAS: The advantages of this type of assisted loan are various and varied. Not only does it entitle to personalized housing assistance (APL), the SAP is also guaranteed by the guarantee fund at the social accession. It must imperatively finance a property constituting the principal residence of the borrower, his spouse, his ascendants, his descendants. The PC: to finance up to 100% a property acquisition project including some expenses such as notary fees or expertise fees, the loan agreement may also be eligible for APL. Although the property financed by this type of loan must be occupied for a minimum of 8 months per year throughout the financing period, the property may be rented under certain conditions.
The PAL: with a regulated interest rate around 1%, the housing equity loan formerly called the 1% housing loan is also considered a personal contribution, it can even finance the notary fees in some cases. Moreover, this type of assisted loan is often repayable over a sometimes short period.
Assisted Loans and Credit Redemption: Eligibility, Special Conditions and Advice
Credit Redemption: Eligibility, Special Conditions and Advice” />
According to the legislation in force, almost all financing, whether real estate or consumer, can be subject to early repayment and therefore a repurchase of credit (real estate or consumption). However, what about the main aided by the state? The PTZ: the zero interest loan is probably the most interesting habitat financing. However, it can be subject to an early refund. In other words, this type of assisted funding is eligible for credit redemption under any particular condition.
Namely that it is impossible to substitute a PTZ by another in the context of a debt repurchase. Thereby. It is therefore recommended not to take into account the part of a PTZ in a buy-out project, unless the operation makes it possible to rebalance the borrower’s finances over the long term by considerably reducing the amount of his maturities. The SAP and the CP: the conventional social loan and the conventional loan can be the object of a repurchase or a regrouping of credits since they are subjected to the legislation which frames the modalities of early repayment of a financing to the habitat. However, as these aided financings are granted mainly for the acquisition, construction or renovation projects of a principal residence, it is impossible to redeem a PAS loan by another or a PC by another.
Therefore, the redemption of PAS or PC is recommended only if the monthly repayments of the new loan are much lower compared to the current amount of the borrower’s installments with the personalized housing assistance (PLA) received thanks to the SAP on the same repayment term. PAL: to finance part of the acquisition of a principal residence, this type of assisted loan can be paid in advance. With a repayment period which is often too fair, the PAL is one of the most frequently assisted financings in loan consolidation projects. In a loan redemption, it is impossible to substitute one PAL for another. However, with its regulated rate of about 1%, its repurchase by a conventional loan can be interesting if the borrower can claim a more attractive interest rate.