How to cancel a revolving credit?
A borrower can completely cancel his revolving credit… as long as he meets certain conditions. The law provides for several scenarios – particularly in the event of financial difficulties – for which the early repayment of a revolving loan is facilitated. Here’s how to request the cancellation of a revolving credit. http://refoksa.com for more.
When does one end up repaying a revolving credit?
When a borrower subscribes to a conventional consumer credit, an end date is provided for under the terms of the loan. This allows him to know when he has finished repaying the amount borrowed initially. In the context of revolving credit, the situation is radically different. It is not anticipated that the contract will end when the last repayment of the amount used has been paid. In a revolving loan, each payment from the borrower only replenishes the amount available for future financing. The loan still exists and it is not possible to terminate it by repaying it.
Only an express request from the borrower can cancel a revolving credit, or if it fails in its repayments, a request from the lender.
Refuse to renew a revolving credit
This is the first case to terminate a revolving credit easily. If in practice, a revolving credit works as if it had no end date, legally, the contract is for a period of one year. On each anniversary, it is tacitly renewed, but the borrower can take the opportunity to end the credit. For this, he must serve the lender his refusal to renew the loan.
Each year – three months before the anniversary date of the contract – the financial institution at the origin of the credit must send the borrower a letter reminding the conditions of renewal or renewal of the loan. The customer then has the opportunity to cancel the revolving credit, refusing to renew or renew it. For this, it is sufficient for him to use the slip-answer attached to the lender’s letter.
Request to terminate the revolving credit
Throughout the life of the loan, the borrower can ask to cancel it. This possibility was opened by the Châtel law of January 28, 2005, and the borrower does not have to invoke any particular reason. Of course, it remains committed by the sums in use, and therefore has the obligation to repay them in full. If the amounts are too large for a one-time repayment, the borrower may request a staggering of payments to avoid a financial hardship.
Note: the credit institution is not obliged to accept a repayment of the debt. Moreover, when the lender proposes it, this facility usually has a cost, which should be studied closely.
Another case allows you to cancel your revolving credit. This is the right of withdrawal. Since 2011, the deadline is 14 days during which the borrower can cancel his acceptance of the loan offer. This is done by simply sending a registered letter with acknowledgment of receipt.
Suspend credit for lack of use
The revolving credit agreement may be suspended if it has not been used in the last year. This possibility is open for the credit itself and for the usually associated credit card. This suspension occurs when the lender provides the credit renewal information for the anniversary date of the contract. If he wishes to keep the revolving credit that he has not used for a year, the borrower must sign and return the renewal document no later than 20 days before the deadline. Otherwise, the revolving credit is suspended. Once the suspension is confirmed, the borrower retains the option to reactivate his credit for one year. If he does not lift the suspension within this period, the revolving credit is terminated automatically.
In practice, this means that a borrower who does not use his revolving credit for a year will see his contract suspended initially and then permanently canceled a year later. Without having to intervene with the lending institution.
Cancel a revolving credit in case of financial difficulties
The repayment of a revolving credit can be spread over several years. During all this time, the borrower’s financial situation will change and repayment difficulties may arise. It is then possible that one or more non-payments of the monthly payments stipulated in the contract occur. In this case, the lending institution can then cancel the revolving credit. It must begin with a formal notice to proceed with the refund. In the absence of regularization, the lender has the right to terminate the credit agreement. Depending on the terms of the contract, he may apply a late payment, demand immediate repayment of the sums borrowed and payment of unpaid interest.