Credit or loan redemption operations are often dependent on the borrower’s employment status. Even if the indefinite employment contract is widely preferred by the lending institutions, the people on fixed-term contracts have arguments to make.
The redemption of loans with a CDD, difficult but far from impossible
Society is evolving and showing, more and more, fixed-term contracts. Formerly intended for low-skilled jobs or used for replacement of sick employees or maternity leave, it is now much more widespread. The CDD can for example allow a company to test a new position or to complete a team following an increase in activity without knowing if it will continue. The fixed-term contract can also be an interesting contract for the employee. It allows the employee to be able to change positions often, which can be interesting in the first years of experience of a young graduate, to gain experience for example.
Despite these advantages, the fixed-term contract remains a precarious contract. It runs over a pre-defined period of up to 36 months and is renewable only twice. Lending institutions need to minimize their risks, a long-term vision. For the redemption of credits, it will therefore be necessary to put forward different arguments.
The arguments to put forward for a redemption of credits in fixed-term contracts
- A period of activity of 3 consecutive years: if the CDD is linked without a period of hollow, it is an argument to put forward because some banks can consider this as a CDI.
- Associate a co-borrower to the transaction: whether it is a spouse or a family member, join a co-borrower on a permanent contract to buy back credit allows the bank to refer to stable and fixed incomes.
- Mention all revenues, have irreproachable accounts, reduce the amount of charges: it is important to neglect nothing. We must peel his accounts and hunt for unnecessary expenses. It is now possible to review its mortgage insurance every year, so it may be interesting to make quotes to reduce its costs. In the context of a fixed-term borrower, it is important to mention all available income, including recurring assistance that is unlimited in time and that can be considered income. The borrower will have to have very well kept accounts with preference savings. The lending institutions will look into the borrower’s bank accounts and nothing should be abnormal.
- Have a civil service contract: public service contracts are considered as permanent contracts by lending institutions.
Why make a redemption of credits when one is on fixed term?
The two main reasons for buying back credits are to avoid over-indebtedness and to reduce the borrower’s monthly payments. In fact, a person on a fixed-term contract may be on a fixed-term contract after the loss of a permanent contract, for example, and periodically return with a reduced income. The redemption of credits allows the grouping of all the credits in a single monthly payment, lower than the sum of all the old monthly payments of credits. This consolidation takes place by extending the total duration of the credit. This also avoids the borrower to find himself in a situation of over-indebtedness as a result of the contraction of several credits that he can no longer repay.
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