Change of credit insurance: here is how to maximize your savings!
In order to compensate for currently low interest rates, the banking companies have high margins, averaging 40%, on loan insurance, and thus largely compensate for the lack of revenue. In order to lighten the cost of the loan, it is possible to act on mortgage insurance. Indeed, a change of credit insurance can achieve up to several thousand euros in savings.
Negotiate with your bank
With the entry into force of the real estate borrowers may terminate their insurance contract to make a change of credit insurance annually two months before the end of the term of the contract, corresponding to the anniversary date of subscription. In order to avoid the loss of customers, banks align their offers with the competition. They have developed individual insurance contracts at attractive rates. It is therefore good to take the time to compare all existing and accessible offers to choose the one that will save you the most.
Choose the right time to make a change of credit insurance
When you take out a loan, choosing a loan insurance policy other than that of the lending institution can save you a lot of money. Failing this, during the first year following the signing of the loan agreement, by using the law, the borrower can make a change of credit insurance, provided that the notion of equivalence of the guarantees is respected.
Also, the amendment provides the right to the borrower to terminate his loan insurance each year at the time of the anniversary date of subscription.
Make a comparison of several proposals
Since January 2016, the lending bank is obliged to issue each borrower client a personalized form that details the criteria required for loan coverage. This document makes it easier to compare the offers of insurance companies or mortgage loan brokers. Remember that to compare, you must take into account the rate of insurance, of course, but also the scope of the guarantees, as well as the method of compensation (indemnity or lump sum), and exclusions of guarantees.
Respect the timing
Once your loan insurance offer has been obtained, you must send it to your bank, taking care to respect the 15-day notice period for the law, and two months in the case of an annual cancellation. The request for change of credit insurance must be made by registered letter with acknowledgment of receipt. We advise you to start your process at least 3 months in advance, to make sure you do not exceed the deadline.