Redeeming credits while requesting additional cash is not incompatible. Restructuring your debts can also be a good time to lay solid foundations, adapt new spending behaviors, and build a real savings strategy. Here we detail the interest of unlocking additional cash at the time of your transaction.
What is cash?
The term cash is used to denote an additional sum of money. Be careful however: credit consolidation is not a cash loan!
It should be borne in mind that the primary objective is indeed to consolidate outstanding credits and debts. The release of additional funds is a possibility, but should not be the main reason for this request.
Debt restructuring therefore provides cash , which can accompany the return to better balanced finances.
This cash, limited to a maximum of 15% of the amount of the transaction, can be a real asset! It is the extra boost to avoid falling into a difficult situation.
What can the cash be used for in the case of a loan buy-back?
Generally, when making offers, we see that cash is requested for three main reasons:
Have a “comfort treasury”
Having a little money up front, working capital is always reassuring. This cash is requested in order to be kept, set aside, to use it in case of need or unforeseen.
Life is punctuated by sometimes difficult and unpredictable periods. This cash will then be able to cope with it, without having to use another loan and therefore new debt!
There are many examples of small worries or “big” problems that can justify this desire to foresee the future. From the car that breaks down, to the death of a loved one, passing through the loss of employment…
Have “cash in advance”
Some households, rather than thinking about the unexpected, try to predict the future as best as possible. You know that you will suffer from a drop in income because your company plans to reduce its workforce? Do you know that you will have to support a loved one who joins a retirement home because their health is getting worse?
So anticipate! A loan repurchase with cash is an opportunity to put money aside and benefit from cash when needed, depending on future expenses that you have already identified. A real solution for managing your finances.
Have cash to carry out a project
Sometimes, when additional cash is requested, it is neither to anticipate nor to protect oneself from future situations. It is simply a solution for carrying out a project, the materialization of which was not possible before the consolidation of the credits.
From carrying out work in your accommodation, to travel desires, expenses for the marriage of children or for a baby who has just arrived, life is full of projects. Debt restructuring makes it possible to add cash which accompanies these projects.
An excellent opportunity to finance a short or medium term project, while avoiding the additional costs linked to a new loan.
The release of funds during a cash request
The repurchase of credits with cash can take very many forms; as we have just seen; the sums of money released can be freely granted or allocated to a specific project.
- Affected cash flow: this is the case when we talk about a concrete project (travel, car purchase, work). In this case, the credit organization will ask you for proof of use of the funds (paid quote, invoice);
- Unallocated cash flow: you have total freedom of disposal. This is the case if you want to place the cash on a savings product, and make it a tool for foresight. The credit institution has no control over the use of the funds.