A subsidized credit benefit from state aid is granted at a more advantageous rate than those offered and practiced on the market. However, should this type of financing be included in a loan buy-back project?
I reduce my monthly payments
I buy back my credits and finance a new project
I renegotiate my mortgage
Enhanced credit: what is it?
By definition, a subsidized loan is a loan with a particularly attractive interest rate compared to conventional bank loans.
Subsidized loans are in most cases, credits granted by state bodies, the beneficiaries of this type of financing actually earn money compared to a bank loan.
Furthermore, under the term “subsidized loan”, we also find credits granted to civil servants, credits granted by pension funds, or even credits granted by state establishments such as EDF/GDF (when an individual carries out work energy saving). Some local authorities (region, department, city, etc.) can also offer subsidized credits.
Some examples of subsidized credit
Subsidized loans (real estate or consumption) are granted on more advantageous terms than those of the market thanks to State aid. There are several types.
- Subsidized civil servant credit: this is a loan under the agreement and complementary to a loan for social accession.
This type of credit must be taken out with Crédit Foncier de France. Namely that it is granted for the purchase of his main residence, its repayment period varies between 10 and 15 years and its amount depends on the real estate project (surface, new or old, geographical area).
- The EDF/GDF subsidized loan: is an additional “assigned” loan that makes it possible to finance improvement work within one’s home, development, work related to the acquisition of real estate.
This loan is also granted by Crédit Foncier. The terms (duration, amount) depend on the nature of the work which must be related to air conditioning, electricity, gas, etc.
- Subsidized credit granted by local authorities: these are also additional credits (consumption and real estate). The amount, duration, and rate of these loans vary according to the allocation criteria set by each local authority.
- The mutual benefit loan is a loan (real estate and consumption) granted by mutual insurance companies and pension funds. The principle is simple, in return for their contributions, the insured can benefit from a loan at a competitive rate.
What is the subsidized corporate equity loan?
The subsidized equity loan is a loan with a term of 30 to 40 years with:
- the first phase with a total deferred capital amortization of 20 years at 0%
- the second phase of 10 years (rehabilitation) to 20 years (construction) at the rate of booklet A + 0.60%
These loans are intended to be guaranteed by local authorities or, failing that, by Calls.
What can the subsidized corporate equity loan finance?
The equity loan is intended to finance the investments of Hlm organizations, in new construction (80% of the three-year envelope and 100% of the 2018 envelope) as well as in rehabilitation (20% of the three-year envelope). The financing of social accession operations may be studied for the 2019 and 2020 tranches.
Is the repurchase of subsidized loans interesting?
The attractiveness of a consumer credit consolidation operation depends on several elements such as early repayment penalties, the possible loss of tax benefits, guarantees, the difference between the rates, the old and the nature of the loans.
In addition, there are a large number of reasons for doing a credit consolidation, and each borrower may have one or more specific reasons.
Including subsidized credit in a credit redemption project, therefore, depends on the financial situation of the borrower and his project.
In all cases, these subsidized and agreed loans are eligible for the repurchase of credit and are not subject to early repayment penalties.
