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According to the ASF (French Association of Financial Companies), the French consumer credit market, after a 25% jump in the first half of 2021, will return in 2022 this year to its pre-crisis level. It must be said that the French are the European champions of consumer credit and credit accumulation. Thus, 84% of French borrowers have already taken out 3 or more loans during their lifetime. It is therefore necessary to support the French in this practice to help them obtain consumer credit wisely, by paying attention to the various aspects that allow them to choose consumer credit wisely.
The different types of consumer credit
There are many reasons for obtaining consumer credit. In fact, a consumer loan can allow either to equip (car, household appliances, etc.), to finance development and renovation work, to carry out a life project (travel, studies, etc.), or to respond financially to an emergency. Remember that for French borrowers, according to a study conducted at the end of 2021 by United and Mix Factory on consumer credit, 76% of loans relate to the purchase of equipment. Therefore, consumer credit in France is above all a means of improving comfort and quality of life.
Depending on the type of expenses envisaged, you can resort to one of three categories of existing consumer credit. First, the allocated balance allows the subscriber to borrow a certain amount for a certain expense, specified at the time of subscription. This may include a car loan or a business loan. A personal loan allows him to borrow money without giving reasons related to the nature of the expense. In this case, the credit subscriber is free to spend the amounts he lends as he likes. Finally, revolving credit or revolving credit, if reduced, allows subscribers to use the sub-loan as they see fit, but also makes it possible to defer monthly payments. In addition, during repayment, the amount available for use is replenished. However, this is the most expensive type of credit.
Consumer credit terms
Before obtaining consumer credit, it is necessary to know the different types of consumer credit that you can consider depending on the purpose for which the borrowed funds will be used, but also to determine the exact amount you wish to borrow, and the term of the borrowing. Most often, according to the same study, the amount of loans ranges from 3,000 to 20,000 euros, and amounts that can be borrowed through consumer credit range from 200 to 75,000 euros. The term is more than 3 months and should not exceed 7 years for Personal Loan and Personal Credit. In the case of revolving credit, the term cannot exceed 36 months if the total amount of credit is less than or equal to 3000 euros and 60 months if the total amount of credit is greater than 3000 euros.
Your borrower profile may affect file acceptance. Still, according to the December 2021 United Mix Factory study on consumer credit, profiles between the ages of 40 and 60 are overrepresented. Borrowers have, in 3 cases out of 4, a stable situation in their personal and professional lives.
Also Read: 5 Signs You Should Switch to Online Banking
Tips for getting good credit
In general, borrowers, when choosing their credit, focus on three criteria: cost of credit, speed of response and simplicity of the procedure.
If judging the last two criteria seems relatively simple, be sure to properly assess the cost of credit. It will indeed be necessary to compare the offers by referring to the APR (Annual Percentage Rate) which takes into account all the mandatory costs and not just by looking at the different interest rates offered. Additionally, if you’re planning on getting insurance, keep this element in mind as you compare the different consumer credit offerings you’ll be considering.
In conclusion, remember that the best consumer credit is the one you don’t subscribe to. It is always more attractive to save to finance a project than to use consumer credit. So it is always recommended to avoid it when possible.