The personal loan is part of consumer loans. It is a credit agreement according to which a sum of money is made available to the consumer, and which will be repaid by periodic payments.
It is not intended to finance a specific purchase as for an assigned loan, but to allow the borrower to meet expenses such as costs resulting from family events, medical expenses, study expenses, taxes, renovation costs, etc.
As it is not linked to the purchase invoice of a specific property, the interest rate charged is higher than that requested for the financing of a specific purchase, because the bank does not have a real guarantee. (linked to a thing) as is the case for financing a car with a car loan or housing with a mortgage.
The personal loan is not justifiable and as for a revolving credit, it does not require a commitment with the lender. A contract called a prior credit offer makes it possible to concretize the agreement made between a third party and the lender. The amount, the rate and the conditions of reimbursement are fixed therein.
A personal loan offer is therefore a consumer loan intended to finance personal needs or the purchase of everyday consumer goods. Reimbursement installments do not reconstitute an available reserve.
How does a personal loan work?
The personal loan or installment loan is composed of a capital corresponding to the sum lent to carry out a project. Reimbursement is always monthly. The period during which the funds are made available is determined at the time of subscription.
Personal loan offers are distributed by credit institutions. It is easier to negotiate than the assigned loan. The disadvantage results from the fact that not being linked to a specific purchase, if the good turns out to be defective or if it is not delivered, it must continue to be reimbursed.
What is a personal loan buyout?
The borrower has the possibility, if he wishes, to resort to the repurchase of personal loan . The repurchase of personal loan consists of the resumption of one or all the personal loans by a banking organization making it possible to reconsider the amount of the monthly payments paid, to renegotiate the rate applied, to give new methods to the credit and also to modify the duration. of its reimbursement.
The repurchase of installment loan applies to the owners as to the tenants. Moreover, it can be done without guarantee if it is less than 90,000 euros. A solution that mitigates the risk of over-indebtedness.
How to apply for a personal loan easily
There are several ways to obtain a personal loan. You can apply for a personal loan from your bank, a broker, or any other credit institution.
The personal loan offer may be more or less advantageous depending on the bank to which you are applying. This is why it can be beneficial to use a broker, who will find the most advantageous bank according to your profile in exchange for brokerage fees (between 1% and 8% of the amount requested) only when the request is accepted and the signed contract.
Applying for a personal loan has become easier since the arrival of digital technology. Just go to the consumer credit application page and fill out the form, on the link below for example, and you can select the type of loan you want to make. This can be a personal loan, but also a work loan, a car loan or even a revolving loan.
How to get a quick and easy loan
Obtaining a personal loan will depend on the study of your file by the banks. The terms of acceptance vary according to each bank. However, the law requires any lending institution to check the creditworthiness of the borrower before accepting a loan. This solvency depends on three criteria:
- Professional criterion: Monthly income, retired or not, CDI or CDD…
- Personal criterion: Owner of real estate or not, family situation, number of dependent children, etc.
- Banking situation: current credit, debts, etc.
You will therefore be asked for certain supporting documents:
- A proof of identity
- Proof of address
- A rib
- last pay slip
- last imposition opinion
Borrower insurance may be an eligibility criterion requested by some banks.
Certain types of credit, such as revolving credits or certain personal loans whose amount is not too high, can be obtained without proof , but this carries greater financial risks that banks generally compensate with a higher rate.
Once the loan application has been accepted by the lender, you will need to sign the contract. You will then have a withdrawal period of 14 days to cancel the operation.
How much can you borrow with a personal loan?
The maximum amount that can be borrowed for a personal loan is €75,000.
However, this amount depends on the duration of the loan, which cannot exceed a maximum duration of 7 years. If the credit is greater than the maximum amount or this duration, it is no longer a personal loan, but a mortgage.
In addition, the amount and duration of the loan varies according to the borrower’s borrowing capacity, the latter must have the ability to repay the monthly payments of his loan. To ensure that the debt will not be too high, the banks ensure that the monthly payment does not exceed 30 to 35% maximum of the household income.
What is the rate for a personal loan and how to calculate the loan total
The fixed rate of a personal loan, also called annual percentage rate (APR), varies according to the repayment period, the amount requested, but also the bank and the profile of the borrower. A rate of more than €15,000 can vary between 1.10% for 1 year and 4.90% for 6 years.
You can use an online simulation or use a formula to calculate the total cost of your APR loan.
But if you want a quick and easy way to calculate your loan, you can also use amortization table , just enter the amount, the rate and the number of years to get an overview of your loan and the amount remaining to be paid for each installment.
Where to apply for personal credit online?
The personal loan is part of consumer credit, you have the possibility of requesting a personal loan from any financial institution providing consumer credit.
