why it’s better to adjust your monthly payments than to suspend reimbursement

Technical unemployment for salaried workers or employees at home, closure of restaurants, bars and markets for the self-employed … Many French people experience (or will experience) a significant drop in their income with the confinement period. Among them, some had even contracted debts with a bank, in the framework of a housing or consumer credit. To relieve them, a solution is provided by the establishments: the extension of the deadline. Several large national and mutual insurance companies have confirmed that they will apply this device to customers who are most in difficulty. A useful solution, but one that is not painless for the borrower.

Because in reality, there are two types of deferrals: partial, or total. While the partial version allows only the payment of principal to be suspended, the total version also includes interest, and in rare cases insurance. “It is the total carryover that is practiced by the overwhelming majority of banks,” said Sandrine Allonier, spokesperson for the broker Vousfinancer. Depending on the institution, the borrower has one to twelve months of deferral, but most often the contracts provide two or three. The monthly payments are thus shifted at the end of the loan.

>> Read also – Real estate: credit, signature… how to secure your operation from home

And the individual, by getting rid of the repayment of his loan, mechanically increases the cost of his credit. Interest is, when it is not paid, considered by the bank as principal owed. But if the capital increases, so does the interest. “To sum up, interest in turn generates interest”, explains Sandrine Allonier. Such an approach also obliges the organization to publish a new schedule, often synonymous with endorsement fees which again will be billed to you. Finally, it should be noted that a 6 month deferral can ultimately extend the credit by 8 months, to compensate

Click here to see more“data-reactid =” 23 “> (…) Click here to see more

New flight system will allow you to learn to fly in just 30 minutes
Orange, SFR, Free, Bouygues… who won the most subscribers in the last quarter?
Emmanuel Macron promises “a massive investment and upgrading plan” for the hospital
He hits a pole and deprives a village of the Internet
Paid Leave: Here’s How Your Employer Can Tax You
“data-reactid =” 24 “>New flight system will allow you to learn to fly in just 30 minutes
Orange, SFR, Free, Bouygues… who won the most subscribers in the last quarter?
Emmanuel Macron promises “a massive investment and upgrading plan” for the hospital
He hits a pole and deprives a village of the Internet
Paid Leave: Here’s How Your Employer Can Tax You