Credit Redemption and Purchase Option Lease (LOA)
It is possible to include in a pool of loans a lease loan with an option to purchase, an operation to reduce its monthly payments.
Rent with option to buy: what you need to know
Rent with promise of sale, leasing, or leasing (English term), there are several denominations to designate a lease with option to purchase . This type of contract is not a traditional lease , it is a final installation whose purpose is to propose another financing formula. It is associated with a product that the consumer wants to buy.
When a rental agreement with a purchase option is subscribed by a consumer, it is subject to Article L.311-2 of the Consumer Code and the provisions applicable to consumer credit . Nevertheless, the APR is not subject to wear rates. As a result, the consumer is a tenant of the property for a specified period of time and may, at the end of the period stipulated by the contract, decide to buy the property by exercising his option to purchase at a price agreed in advance.
Namely that this price is the residual value of the good after the tenant consumer has paid rents for a certain period. This type of financing is generally used for the purchase of consumer goods for which the price is relatively expensive (car, boat, electrical equipment, etc.)
Reimbursement of a lease with option to purchase
In a LOA contract, repayment terms are well-defined and vary depending on the leased property and the rental lenders. In principle, the rental can not be subject to early repayment. As an exception, if the rental agreement provides that the leased property will ultimately belong to the tenant, subject to the payment of a price agreed in advance, then a prepayment (total) is possible.
However, by making this early repayment, the borrowing tenant immediately acquires the property. In addition, the terms of repayment provided for in the lease may be modified under certain conditions. In fact, as the risks related to the loss or theft are borne by the lessee, the realization of the guarantees covering these risks (all-risk insurance) automatically entails the completion of the contract. As a result, renting may require early redemption. In case of rejection or refusal of payment, the rental organization may also request the termination of the contract and its early repayment.
Purchase of credits and lease with option to purchase
A borrower with several loans, including one or more rentals with an option to purchase, can use the pooling of credits to reduce his monthly payments. The principle is simple, the loans are collected in one, which allows to reschedule the repayment period and thus to propose a smaller monthly payment, adapted to the capacity of repayment of the household.
Different types of loans can be collected, be they mortgages, consumer loans or leases with an option to purchase. Regarding the purchase of LOA, there is often a minimum waiting time to be able to redeem this loan, the borrower must either wait this minimum period (usually 1 year from the signing of the contract), or ask not not take back this loan.
Feasibility study for LOA acquisition
It is difficult to project without obtaining a feasibility opinion and an estimate of future reduced monthly payments. It is possible thanks to the simulator to obtain this estimate directly online, it is free and without commitment.
Of course, it is strongly recommended that you complete the application form in order to obtain a definitive opinion on the feasibility of the financing project and the amount of the reduced monthly payment. It is also an opportunity to know if the lease with option to purchase can be included in the financing.