“Is consolidating your loans really a good deal? Be cautious of hidden risks and costs”

Be careful, the grouping of bank loans, real estate loans, consumer loans for example, is not necessarily advantageous, and it is even sometimes risky. Fanny Guinochet’s explanations.

franceinfo: Normally Fanny, this should allow us to save money from this grouping of credits, and you are telling us to be careful, can it be risky?

Fanny Guinochet : This is what denounces the regulatory body, theACPR, the Banking and Insurance Prudential Control and Resolution Authority, which conducted the investigation for 2 years, and which calls for caution. Grouping these loans – whether real estate or consumer – should reduce costs, and therefore lower the amount of monthly payments. Well no, because often, of course, you are offered to pay less per month, but in return, to pay longer, to extend the duration of your credit over time. And sometimes, doubling this duration.

Why this consideration?

Quite simply, because often, the intermediaries or the establishments, are remunerated in passing. They spend time on your file to put everything together, and so they kind of pay themselves, they take a commission. There are also often file fees that fly away, warranty and insurance costs that are added.

But often, notes the ACPR, banks or brokers do not tell you. They just make you dangle the lower monthly payments, without going too far on the rest, so be vigilant about everything: the amount of the new loan grouped together, the cost of interest, but also the rate. Several credits negotiated when the rates were low, a few months ago, remain more advantageous than a single credit, at a much higher rate.

And the regulator’s advice is to always ask for a written quote, before you commit, do not stick to an oral proposal. It sounds silly, but it avoids unpleasant surprises, and then as always, do not hesitate to play the competition, to request quotes from several financial institutions. It’s free.

If you are followed, there is no point in renegotiating?

Let’s say that you have to be well informed, because you have to handle this tool with care. However, this remains interesting, if you want to lower your monthly payment, and spread it over time. But often, when you make this choice, it’s because you’re a bit stuck in the throat, you can’t get out of it, you risk over-indebtedness, and precisely, warns the regulator, it It is in these moments that we are most vulnerable.