A personal loan is a consumer credit granted by a bank or credit institution. The use of funds is free. This credit is not allotted for the purchase of a particular good.
Characteristics of a personal loan
Personal loan is a Consumer loans aimed at financing special needsthat are not related to a commercial or professional activity.
It does not finance the purchase of real estate or the construction of land, for example. In this case, it is necessary to obtain a mortgage.
A personal loan is subject to the provisions of the Consumer Law when its amount is between 200 euros and 75,000 euros.
A personal loan is obtained from a bank or a specialized financial institution. Not No need to justify his mission : Furniture, Travel, Parties, Home Appliances, IT… The The borrowed amount is provided at onceBy paying into the borrower’s bank account.
The lender must inform you and verify your creditworthiness
As with any consumer credit, the lender must provide you with all the necessary information to allow you to assess whether the proposed credit is appropriate for your needs and financial situation. Your attention should be drawn to the consequences of a possible non-payment.
The lender is required to verify your creditworthiness. For this, you may be asked to provide different information. And he has the duty to refer to the national file of incidents of repayment of credits to individuals (FICP).
If the personal loan is obtained online or over the phone, The lender must create, in writing, an information sheet (known as dialogue paper ”) indicating the amount of your income, expenses and debt for loans you have already taken and are in the process of being repaid (Section L312-17 of the Consumer Code). This form is submitted to you and you must sign it, declaring in your honor the accuracy of the information provided. For loans over For 3000 euros, you must also provide proof of identity, residence and income.
Personal loan cost
With a personal loan, the interest rate and monthly payments are fixed for the life of the loan. This is a consumable credit.
The loan rate is expressed as Annual Percentage Rate (APR)which includes all mandatory credit withdrawal fees.
When subscribing toBorrower insurance It became mandatory to obtain consumer credit, and the annual interest rate includes insurance costs.
The lender must respect the interest rates that are published every three months by Bank of Francewhich varies according to the loan amount.
Signing the personal loan contract and the right of withdrawal
The credit offer is made by the lender to each participating borrower (and the deposit if required). It is valid for at least 15 days.
Your signature on the personal loan contract constitutes acceptance. However, the approval of the lender is necessary, within 7 days of your acceptance, to confirm the grant of the loan.
You have 14 calendar day period from your signature To exercise your right of withdrawal and assignment of credit. https://www.lafinancepourtous.com/pratique/credit/credit-a-la-consommation/droits-et-obligations-de-l-borrower/le-droit-de-retractation/
Early repayment of personal loan
You can repay your personal loan in advance at any time, in part or in full. You don’t have to justify yourself.
The lender may ask you to reimburse early When you prepay a personal loan or assign a credit of more than 10,000 euros over a 12-month period.
The amount of compensation depends on the term of the loan remaining to be repaid
The compensation is higher because the normal end of the credit is far in time. If prepaid :
- Less than a year before the end of the loan: can not exceed compensation 0.5% of the credit amount subject to early redemption;
- More than a year before the end of the loan: can not exceed compensation 1% of the credit amount Subject to early redemption.
Whatever the situation, Early repayment compensation It must not exceed the amount of interest that you should have paid between the early repayment date and the initial date of the end of the credit agreement.
For consumer loans obtained before April 30, 2011, the lender cannot request any compensation for repayment.