Debt Consolidation, Credit Repurchase, Simplify Your Repayments

Debt consolidation (also known as credit repurchase, debt refinancing, or loan restructuring) is a financial transaction that consists of merging several of your existing loans (personal loans, car loans, revolving credits, bank overdrafts, and sometimes even tax or social debts under certain conditions) into a single new loan.

The main objectives are:

• To simplify your budget management: You only have one monthly payment to make on a fixed date to a single institution.
• To reduce your monthly expenses: By adjusting the term of the new loan (often by extending it), the new single monthly payment can be lower than the sum of your old monthly payments. This can give you back purchasing power or more financial leeway.
• To obtain a potentially more advantageous overall interest rate: Especially if you have revolving credits with high rates.
• To finance a new project: It is often possible to include additional cash in the consolidation for a new need (renovations, car, etc.).
• To improve your debt-to-income ratio: By reducing your monthly payments, your debt-to-income ratio may decrease, which can make it easier to access future financing (like a mortgage).

In summary, debt consolidation aims to clarify your financial situation, reduce your budgetary stress, and adapt your repayments to your current financial capacity.

Applying for debt consolidation at CPE Credit is a simple and transparent process:

1. Online Simulation: Use our simulator on the website. Indicate the amounts and types of loans to be consolidated, as well as your income and expenses. You will get a first estimate of your new monthly payment and APR. It’s free and non-binding.
2. Application Submission: If the simulation suits you, you can submit your application online by completing the required information.
3. Contact and File Analysis: One of our specialized advisors will contact you quickly (usually within 24 working hours) to discuss your situation, verify the information, answer your questions, and inform you of the necessary documents (ID, proof of income and expenses, details of current loans).
4. Document Submission: You send us the requested documents securely (by email, platform upload, or in-branch).
5. Contract Offer: After a complete and positive review of your file, we will send you a debt consolidation contract offer, accompanied by the Standard European Consumer Credit Information (SECCI/ESIS).
6. Contract Signature: Take the time to read the offer. If it suits you, you sign it (electronically or in-branch). You have a legal withdrawal period of 14 days.
7. Repurchase of Your Loans: Once the contract is final, we take care of directly repaying your former creditors. If additional cash was granted, it is paid to you.
8. Implementation of the New Loan: You start repaying your new single monthly payment to CPE Credit.

The cost of debt consolidation depends on several factors:

• The total amount of the consolidated loans.
• The Annual Percentage Rate (APR) obtained for the new loan. This rate includes interest and all mandatory fees.
• The chosen repayment term for the new loan. A longer term reduces the monthly payment but increases the total cost of the credit (more interest paid over the duration).
• Potential application fees: At CPE Credit, for applications initiated online, application fees are often waived or reduced. If application fees apply, they are clearly stated in the offer and included in the APR calculation.
• Early repayment penalties of your old loans: Your former creditors may claim penalties if you repay your loans ahead of schedule. These penalties are legally capped. We generally include them in the amount of the new loan.
• The cost of any outstanding balance insurance (if you choose to subscribe to it).

Our online simulator gives you a first estimate of the APR and the total cost. The personalized contract offer will detail all costs transparently. The goal is to find a balance between a sustainable monthly payment and a controlled total cost.

Important: A debt consolidation that extends the initial repayment term can lead to an increase in the total cost of the credit, even if the monthly payment decreases. It is crucial to evaluate this aspect carefully.

APR stands for Annual Percentage Rate.

It is a standardized indicator at the European level that represents the total real cost of your credit on an annual basis. It is expressed as a percentage of the total loan amount.

Why is it so important?

• It includes ALL mandatory fees: Unlike the nominal interest rate (or debtor rate), the APR includes:
  • The interest on the loan (calculated from the debtor rate).
  • Application fees (if any).
  • Insurance costs (only if the insurance is mandatory to obtain the credit and if it is subscribed through the lender).
  • Other potential fees related to granting the credit (e.g., appraisal fees if applicable).
• It is the BEST comparison tool: Since it includes all costs, the APR allows you to objectively compare different credit offers, even if they come from different lenders or have different fee structures. The offer with the lowest APR will be the cheapest, all other things being equal (same amount, same term).
• Legal requirement: Lenders are legally obligated to display the APR clearly and visibly in their advertisements and contract offers. This is intended to protect the consumer and ensure transparency.

In short, do not rely solely on the nominal interest rate. The APR is the key reference for assessing the real cost of debt consolidation and making an informed choice.

Subscribing to insurance with a consumer debt consolidation is generally not required by law. However, it is strongly recommended by CPE Credit and may be required by some lenders in specific cases (large amounts, particular risk profile).

The most common insurance is outstanding balance insurance. Here are its advantages:

• Protection in case of death: If you were to pass away before the end of the repayment, the insurance covers the remaining balance of the loan. This prevents your heirs (spouse, children) from having to repay this debt.
• Protection in case of disability: Depending on the chosen coverage, the insurance can also cover repayment in case of Permanent Total Disability or Temporary Total Incapacity for Work following an illness or accident.
• Peace of mind: Knowing that your loved ones are protected and that the credit will be repaid in case of a major life event provides significant peace of mind.

Points to consider:

• Cost: The cost of the insurance is added to your credit’s monthly payment (or is paid as a single premium). It depends on your age, health, the amount borrowed, and the chosen coverage.
• Optional or mandatory nature: Your CPE Credit advisor will clearly indicate whether the insurance is a condition for granting the loan or if it is optional.
• Free choice of insurer: Even if the lender offers you insurance, you generally have the right to choose another insurer, provided that the contract offers equivalent guarantees (insurance delegation).

At CPE Credit, we will advise you transparently on the advisability of taking out insurance and will present the available options so that you can make an informed decision based on your personal situation and your desire for protection.

Yes, you have a legal right of withdrawal after signing your debt consolidation contract (whether it is a consumer credit or a mortgage).

Here are the key points regarding this right:

• Period: You have a period of 14 calendar days to exercise your right of withdrawal. This period starts from the day the credit contract offer is signed.
• No reason required: You do not need to justify your decision to cancel the contract.
• No penalties: Exercising this right cannot result in any financial penalties from the lender. However, if the funds have already been partially or fully used (e.g., to repay your old loans), you will have to repay the lender the principal paid out and the interest calculated on that principal for the period you had it, as well as any non-recoverable costs paid by the lender to third parties (e.g., appraisal fees for a mortgage consolidation).
• How to do it: To exercise your right of withdrawal, you must notify the lender of your decision by a means that can prove the date of dispatch (e.g., a registered letter with acknowledgment of receipt). A withdrawal form is often attached to the contract offer.
• Effects of withdrawal: If you withdraw validly, the debt consolidation contract is cancelled. If your old loans have already been repaid by the new lender, the situation can become complex as those old contracts are not automatically reactivated. It is crucial to understand the implications before withdrawing if the process has already begun.

This right of withdrawal is an important consumer protection, allowing you to reflect on your commitment even after signing. At CPE Credit, we clearly inform you of this right in our contract offers.

The SECCI (Standard European Consumer Credit Information) or, in the context of mortgages, the ESIS (European Standardised Information Sheet), is a standardized information document at the European level that must be given to you by the lender before you sign a credit agreement (consumer or mortgage).

Its importance is crucial for several reasons:

• Transparency: It presents all the essential features of the credit offer in a clear, concise, and standardized way. This allows you to fully understand the terms and conditions before you commit.
• Easier comparison: As the format is standardized throughout the European Union, you can easily compare offers from different lenders (banks, brokers, credit institutions) on an identical basis.
• Key information grouped together: The SECCI/ESIS contains crucial information such as:
  • The identity and address of the lender and any credit intermediary.
  • The type of credit offered.
  • The total amount of the credit and the conditions for the disbursement of funds.
  • The duration of the credit agreement.
  • The borrowing rate (fixed or variable) and the conditions for its variation.
  • The Annual Percentage Rate (APR) and the total amount you will have to repay.
  • The amount, number, and frequency of repayment installments (indicative amortization schedule).
  • Any fees (application fees, fees for certain services, etc.).
  • The conditions for early repayment and any penalties.
  • The existence or absence of a right of withdrawal and its terms.
  • The consequences of default.
  • Information on any required or proposed insurance.
• Informed decision-making: By having all this information in a structured manner, you are able to make a more informed decision and choose the offer best suited to your situation and needs.

The lender is required to give you a reasonable amount of time to review this document before you commit. Never sign a credit agreement without having received and carefully read the corresponding SECCI or ESIS.

If you encounter difficulties in repaying one or more installments of your debt consolidation, it is crucial to act quickly and not to ignore the situation.

Here are the steps and possible consequences:

1. Contact your lender (CPE Credit) immediately: This is the first and most important step. Explain your situation (job loss, illness, major unexpected expense, etc.). The sooner you contact us, the easier it will be to find an amicable solution.
2. Possible amicable solutions: Depending on your situation and the terms of your contract, we may consider:
   • A payment deferral: Postponing the payment of one or more installments to the end of the loan (this increases the term and the total cost).
   • A loan rescheduling: If the difficulties are long-term, a new review of your file could allow for rescheduling the debt over a longer period to reduce the monthly payment (this also increases the total cost).
   • A personalized repayment plan: Establishing a temporary schedule adapted to your capabilities.
3. Consequences of non-payment and lack of contact:
   • Late payment interest and fees: Late payment interest (often at a higher rate) and collection fees will be applied to the unpaid amounts.
   • Formal notices: You will receive reminder letters, then a formal notice asking you to regularize the situation.
   • Acceleration clause: If the arrears persist (usually after 2 or 3 missed payments and after a formal notice has gone unheeded), the lender can invoke the “acceleration clause.” This means that the entire remaining principal becomes immediately due.
   • Credit bureau reporting: In Belgium, any payment default of more than 2 or 3 months (depending on the case) for a consumer or mortgage loan is reported to the Central Individual Credit Register (CICR) of the National Bank of Belgium (NBB). Similar systems exist in Luxembourg. This “negative listing” (blacklist) will prevent you from obtaining new loans for several years, even after regularization.
   • Legal collection procedure: If no solution is found, the lender can initiate legal proceedings to recover the amounts due (wage garnishment, seizure of assets, etc.).

Prevention: The best solution is to anticipate. If you feel you are going to have difficulties, contact us BEFORE you are in default. Good communication is essential. Also, consider the outstanding balance insurance which can cover certain life events.

Debt consolidation can have various impacts on your “credit score” (a score used by some lenders to assess risk) and on your status with credit bureaus (like the NBB in Belgium or the CSSF in Luxembourg).

Possible impacts:

• Credit Bureau Inquiry: When you apply for consolidation, the lender (CPE Credit) will systematically check the Central Individual Credit Register (NBB/CICR in Belgium) or similar bodies. This inquiry is a normal step and is not negative in itself, but multiple, closely-spaced inquiries with many different lenders could be interpreted by some scoring systems as a sign of a desperate search for credit.
• Short-term:
  • If the consolidation is approved and your old loans are paid off, your credit file will be updated: the old loans will appear as “paid off” and a new loan (the consolidation loan) will be registered. This is not a negative listing.
  • Opening a new credit line (even a consolidation) can temporarily cause a slight dip in some credit scores, as it increases your total debt at that moment, before the positive effect of simplified management is felt.
• Medium and long-term (generally positive if well-managed):
  • Improved debt-to-income ratio: If the consolidation reduces your total monthly payment, your debt-to-income ratio decreases. This is a positive factor for your borrower profile.
  • Better management: By simplifying your repayments (one single payment), you reduce the risk of forgetting or making a late payment. Regular, on-time payments on your new consolidation loan will have a positive impact on your credit history.
  • Reduction in the number of active loans: Switching from several small loans to a single, larger one can be viewed positively by some scoring models.
• Impact in case of a pre-existing negative listing:
  • If you are already negatively listed at the NBB/CICR for payment defaults on your current loans, obtaining a consolidation can be more difficult, but not always impossible (especially if you are a homeowner).
  • If the consolidation is approved and allows you to clear all your arrears, it does not immediately erase the negative listing (which has a legal duration), but it shows your willingness to rectify the situation. Regularly paying your new consolidation loan will be crucial.

In summary, a well-conducted and properly repaid debt consolidation tends to improve your financial profile over time by optimizing your management and your debt-to-income ratio. The key is to always honor your payments.

Including professional or tax debts in a debt consolidation intended for individuals is possible but subject to strict conditions and depends on the type of consolidation considered (consumer credit or mortgage).

Professional Debts (for self-employed, liberal professions):

• Standard professional loans: Loans taken out specifically for professional activity (e.g., investment loan for equipment, professional cash credit) generally cannot be included in a standard consumer credit consolidation. The latter are reserved for private debts.
• Specific solutions for the self-employed: There are consolidation solutions designed for the self-employed that may allow for the restructuring of both private and certain professional debts (especially if the self-employed person operates as a sole proprietor and their private and professional assets are linked). This requires an in-depth analysis.
• Mortgage consolidation: If you own a property, a debt consolidation with a mortgage guarantee could offer more flexibility to include certain professional debts, but this will depend on the lender’s policy and the value of the property.

Tax Debts (VAT, contributions, income tax) and Social Debts (social security contributions):

• Very strict conditions: The inclusion of tax or social debts is complex and rarely accepted in a consumer credit consolidation. Lenders are often reluctant because these debts are preferential and have legal guarantees for the state.
• Existing repayment plan: If you already have an official repayment plan with the tax or social security administration and you are complying with it, it is sometimes possible to integrate the monthly payments of this plan into the calculation of your expenses, but not to buy out the debt itself.
• Mortgage consolidation: Again, a consolidation with a mortgage guarantee may, in very specific cases and if the overall situation allows (good profile, sufficient property value), consider the buyout of certain tax/social debts to completely clean up the situation. This is examined on a case-by-case basis.
• Transparency is essential: It is imperative to be completely transparent with your CPE Credit advisor about the existence of such debts. Trying to hide them would only complicate the situation.

Conclusion: Speak openly about all your debts (private, professional, tax, social) to your CPE Credit advisor. They will be able to analyze your overall situation and indicate the most suitable and realistic solutions. Do not assume that all debts can be consolidated in the same way.

The time it takes to finalize a debt consolidation can vary considerably depending on several factors. A distinction can be made between consumer credit consolidations and consolidations with a mortgage guarantee.

For a consumer credit consolidation (without a mortgage guarantee):

• Average time: Generally, once your file is complete (all supporting documents provided), the process can take between 5 and 15 working days.
• Accelerating factors:
  • A complete and well-prepared file from the start.
  • Your responsiveness in providing any additional documents.
  • The simplicity of your situation (few loans to buy out, clear financial situation).
  • The efficiency of the lender’s internal processes.
• Key steps and their approximate durations:
  • Online simulation and application: a few minutes.
  • File analysis by the advisor and request for documents: 24-48 hours.
  • Receipt and verification of your documents: 1-3 days (depending on your speed).
  • Final decision and issuance of the contract offer: 1-3 days.
  • Reflection period and contract signature: variable (you have a 14-day withdrawal period after signing).
  • Repayment of former creditors and release of funds: 2-5 days after the end of the withdrawal period and receipt of the signed contract.

For a debt consolidation with a mortgage guarantee (including a mortgage buyout or a new mortgage to consolidate consumer loans):

• Average time: The process is significantly longer, often between 4 and 8 weeks, or even more.
• Reasons for this delay:
  • Property appraisal: An appraisal of the value of the property used as collateral is necessary.
  • Notarial deed: The operation requires going before a notary to register the new mortgage (or modify the existing one), which involves administrative and legal delays.
  • File complexity: The analysis is more in-depth.

At CPE Credit, we strive to process your request as quickly as possible while scrupulously respecting the legal steps and ensuring a rigorous analysis of your file to offer you the most suitable solution. The speed of finalization will also greatly depend on how quickly you provide us with a complete file.

Obtaining a debt consolidation when one is negatively listed with the National Bank of Belgium (NBB) for payment defaults, or if one has loans in litigation, is significantly more difficult, but not always impossible. It will depend on the nature of the listing, your overall situation, and the guarantees you can offer.

What you need to know:

• Systematic check of the NBB: Any lender in Belgium will consult the Central Individual Credit Register (CICR) of the NBB before granting a loan. A negative listing (specific codes indicating payment arrears) is a major red flag.
• Why is it more difficult? A negative listing indicates that you have had difficulty honoring your financial commitments in the past. Lenders therefore consider the risk of a new default to be higher.
• Possible solutions (but limited and under strict conditions):
  • If you are a homeowner with NO or LITTLE mortgage on your property: This is the most favorable situation for considering a consolidation despite a negative listing. The lender may agree to consolidate your debts (including those in litigation) by taking a mortgage guarantee on your property. The value of the property must be sufficient to cover the total amount to be consolidated. The lender’s goal is to clean up your situation and protect itself with the guarantee.
  • Nature of the listing: A listing for a few delays that have since been regularized is less penalizing than a listing for large, long-unpaid debts.
  • Income amount and stability: Even with a negative listing, if you have a stable and sufficient income to handle the new monthly payment (which will be calculated cautiously), this can work in your favor.
  • Willingness to regularize: The consolidation must aim to clear all outstanding debts and start over on a sound basis.
• If you are a tenant and listed: Obtaining a consumer credit consolidation becomes very complicated. Lenders are extremely reluctant as there is no solid guarantee to offer.
• Absolute transparency: It is crucial to be completely honest about your listing status and any litigation from the very beginning of your application. Trying to hide it will only lead to a later refusal.

Conclusion: At CPE Credit, we analyze each situation on a case-by-case basis. If you are listed, the best approach is to contact us to openly discuss your situation. If you are a homeowner, we can explore mortgage consolidation options. The goal will always be to find a viable solution to help you out of a difficult financial situation, while respecting the rules and your future repayment capacity.

One of the main objectives of debt consolidation is often to reduce the amount of the monthly payments to lighten the burden on the monthly budget. To achieve this, the most commonly used lever is the extension of the repayment term of the new single loan.

This has direct consequences:

• Impact on the total repayment term:
  • If the term of the new consolidation loan is longer than the remaining terms of your current loans, you will be repaying your total debt over a longer period.
  • Example: You have loan A with 2 years remaining and loan B with 4 years remaining. If you consolidate them over 6 years to lower the monthly payments, the overall duration of your indebtedness increases.
• Impact on the total cost of the credit:
  • Mechanically, extending the term of a loan, even at an identical or slightly lower interest rate, increases the total cost of the interest paid. You pay interest over a longer period.
  • Therefore, even if your monthly payment decreases, the total amount you will have repaid at the end (principal + all accumulated interest) will often be higher with a consolidation that extends the term.
  • However, if the consolidation allows for a significantly lower APR than the average APR of your old loans (especially if you had expensive revolving credits), it is possible in some cases that the total cost will only increase moderately, or even (more rarely) decrease if the term is not excessively extended.

The essential trade-off: Monthly relief vs. Overall cost

Debt consolidation often involves a trade-off:

• Immediate advantage: A lower monthly payment, more “disposable income” each month, less financial stress.
• Potential long-term disadvantage: A higher total cost of credit.

At CPE Credit, our advisory role is to:

• Clearly present to you the impact of extending the term on the total cost.
• Help you find the best balance between a monthly payment that becomes comfortable again and a repayment term that does not excessively increase the final cost.
• Explore all options, including those that do not unduly extend the term if your repayment capacity allows it.

It is crucial to fully understand this aspect before committing. The Standard European Information Sheet (SECCI/ESIS) will give you a clear view of the total amount to be repaid and the total cost of the credit for the proposed offer.