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As with any loan, a group loan commits the co-owners who benefit from it. How is the repayment of such a loan concretely? Explanations.

What is the repayment term for a group loan?

The repayment term of a co-ownership collective credit is specified in the subscription agreement. It generally varies between 3 and 10 years, depending on the amount of work to be done, repayment capacities of the co-owners, and the overall amount of the transaction.
On this last point, it is important to bear in mind that the collective loan is a solution for many condominiums, but that it still represents a high cost (higher interest rate, management fees). annual report of the trustee...).
Also, as for a classic home loan, it is possible to make early repayments, which can also be exempted from penalties.

What monthly repayments for a group loan?

The repayment of a collective credit is not made in the form of monthly payments proper, since the deadlines are quarterly.
In addition, the sums due, which are based on the annual percentage rate (APR) and the share corresponding to each property, are deducted either from the account of the co-owners concerned by the bank. lender directly, either on the account of the trustee of the co-ownership.

What happens in the event of default by a co-borrower?

The co-borrowers Since a group credit is not in solidarity with one another, the lending bank can not turn to them in the event of payment default by one of the co-owners.
In this type of situation, the trustee must send a registered letter of formal notice to the co-owner concerned. Left unanswered after 30 days, he can then appeal to the loan guarantee, which will take over the deadlines reimbursement but also recovery from the defaulting co-borrower.

What happens if a co-borrower wants to sell his property in co-ownership?

In case of resale of his propertythe co-owner receiving the collective credit must inform the purchaser and must have his consent. The notarial act signed, the repayment of the loan then becomes the business of the new co-owner.

Video Instruction: Consider the Benefits and Risks of a Joint Loan