What type of loan insurance guarantee can we take out?

To borrow, it is very often necessary to bring a loan insurance guarantee in order to protect yourself and assure the lender that it will be reimbursed. To grant a mortgage, even if the subscription of a loan insurance is not legally compulsory, the banks and the credit organizations indeed require its subscription.

 

Guarantee your credit with borrower insurance

Guarantee your credit with borrower insurance

Borrower insurance, also called credit insurance, loan insurance or borrower guarantee, covers all or part of the repayment of a loan in the event of difficulties encountered by the borrower to honor its payments following the occurrence of a risk covered by the contract: death, disability, incapacity for work or unemployment. Any loan insurance guarantee involves the payment of a premium added to the monthly payment of the credit.

 

Two types of loan insurance

There are two types of guaranteed loan insurance contracts:

  • Group insurance
  • Individual insurance

Group insurance: a contract offered by banks

This insurance is a collective (risk pooling) and standard contract that has been previously taken out by the banking establishment with an insurer in order to offer it as loan cover to its customers. To benefit from this loan insurance guarantee, it is necessary to enter an average of borrowers and therefore to correspond to the conditions of the contract. In the event of a high or specific risk, the bank may refuse to grant you its “house insurance”.

Individual insurance: a contract external to the lender

You can take out insurance other than that of the bank, by choosing your insurer. This is called delegation of insurance. In this case it is an individual insurance. This type of insurance has the advantage of being established according to the profile and the situation of the borrower. It is therefore suitable both in terms of price and guarantees. If you are young and you do not present any particular risk, you can make significant savings on your credit by opting for this type of contract. And in case of refusal to grant group insurance by the bank, the delegation of insurance is a very good alternative to guarantee your loan and therefore release the funds.

 

You can choose your credit insurance

You can choose your credit insurance

Finally, since November 8, 2016, you have the option of terminating your loan insurance contract each year, on its anniversary date, to replace it with another that you have taken care to find with the competition in order to benefit from ” a lower rate or to set up more extensive guarantees to be better covered, and in a more suitable way, depending on your borrower profile.

To choose your loan insurance correctly, use an insurance comparator, carry out an online simulation and / or contact a broker specialized in insurance directly.

What type of loan insurance guarantee can we take out?

Change Loan Insurance To Reduce The Cost Of Your Mortgage

While the mortgage rate stops falling today and the real estate market is slowly recovering, the trend among banking establishments is to tighten the terms of loan agreements. But that does not in any way slow down the influx of files. There is always time to borrow or save money by playing loan insurance.

 

Aim for the economy: change loan insurance

Although the 10-year OAT rates have recently risen, mortgage rates remain at a historically low level. The French are inclined to concretize their projects by submitting their financing request or by undertaking a renegotiation of credit or a loan repurchase.

However, given that banking organizations and credit organizations receive a very large number of requests, the processing times for files, and therefore for signing credit contracts, have greatly increased, and for certain organizations up to double.

But all this time allows you to serenely look into loan insurance in order to achieve maximum savings. The share of this insurance in the cost of a loan can reach 40% since low rates have led to a drop in interest. By taking advantage of the new reforms, borrowers have everything to gain!

 

Legislation that favors the borrower

money loans

The role of loan insurance is to guarantee the repayment of a loan, according to the terms fixed in the contract, when the borrower finds himself in financial difficulty due to a situation of incapacity for work, disability. , death or job loss.

Before the Lagarde law of September 2010, this loan guarantee was systematically contracted with the financial institution granting the credit. But since this law, borrowers can freely choose their insurer on the condition of choosing a contract comprising a level of guarantee at least equivalent to that of the group insurance contract offered by the lender. In 2014, the Hamon law came to strengthen the legislation in favor of the consumer: the borrower can now change the loan insurance contract during the first year of the credit’s life. Finally, recently, a list of criteria has been introduced intended to make it easier to compare insurance offers for consumers, as well as case law which grants the right to terminate at annual maturity. The context is therefore ideal for any indebted owner wishing to reduce the cost of his loan,