The personal loan is a simple way to finance all kinds of purchases or projects. It can also offer great flexibility if it is not earmarked for a specific purchase or project. Before taking out a personal loan, be sure to check the rates offered by the banks.
Definition of a personal loan
For various purchases, to carry out a project of any kind or to face unforeseen events, you have the possibility to resort to a personal loan. Its main characteristics are :
- Its amount may not exceed 75,000 euros
- Its duration is included between 3 months and 5 years.
- The lending institution must have a approval of the bank of France.
- It is a fixed-rate creditThis means that the rate is unchanged for the entire term of the loan. This rate depends on the value and duration of the loan.
It is important to turn to a comparator to take out a personal loan at the best rate. Some sites also offer simulations to find out the amount of the monthly payments according to the duration of the loan, the amount borrowed and the interest rate. It is also advisable to rely on the APR as the primary basis for comparison and not on the nominal rate.
To get the best rate, you also have the option of negotiate with your banker especially if you have a good profile and have been with the same bank for a long time.
Once you have decided on a financial institution, make sure that the contract mentions all the details of the credit. Also make sure that the fees applied are not outside the scope of the law. For example, you should find the registration fee, the application fee and the loan insurance fee. Finally, find out the bank's policy on early repayment and any additional fees that may apply.
Affected and unaffected personal loans
There are two types of personal loans, the affected personal loan and the unaffected personal loan.
The affected personal loan
It concerns a purchase or a project that must be specified to the lending institution. To do this, you must send the institution concerned the documents that justify the use of the sum lent.
The non-affected personal loan
The lender can use the loan amount as he or she wishes. It can be granted without proof and is an interesting alternative to revolving credit because, unlike revolving credit, the term of the loan is established in advance. However, the lender considers that the risk is greater and therefore charges a higher interest rate. In addition, the borrower does not have no protection if the product purchased is unusable and must continue to pay back credit.
Why compare rates?
Your bank offers you a rate for your personal or real estate loan and you intend to sign your contract quickly. However, by looking with the greatest rigor at comparison sites dedicated to rates like Make a creditYou will find that the percentages can be quite high among competitors. Of course, the files are studied with precision by the advisors, but you can already have an idea with such a comparison of the organizations.
- At Cofidis, you can get 3.6 % over 48 months.
- Carrefour Bank stands out with 1.5 % over a maximum of 24 months.
- Cetelem even offers you 1 % during a promotional offer.
These three examples are enough to convince you to compare all the rates, because they are not the same from one organization to another. Moreover, you are not obliged to take out a loan with your bank, you can multiply the simulations with competitors in order to get the best quality/price ratio. If the results of the comparison meet your needs, you can also approach the advisors. They will then offer you a much more precise contract.
Is online credit interesting?
You have two categories, the traditional banks that have physical stores and the online versions that exist only on the web. The main difference is the absence of premises, which allows to reduce the fees and therefore the costs. This is one of the reasons why rates can be more interesting for web-based organizations. Moreover, you have other advantages even for a current account, because the application fees are often offered as well as the bank card.
Subscribing on the Internet is also very simple since all the steps are done via the forms. You use the simulator to obtain a proposal and you send your file to the advisor who will study it with the greatest rigor. An answer is usually sent within 48 hours and if the loan is granted, it is possible to send all the documents via the Web. It is simple and very fast since you do not have to go anywhere.