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Consumer Credit Application: What You Need to Know


You have a project to finance and consider subscribing to a consumer credit but do not know what type of loan best suits your needs? You are in the right place. Know that there are different types of consumer credit and it is important to know them to better focus its research. What is consumer credit? Where and how to apply?

 

Consumer credit, what is it exactly?

Consumer credit, what is it exactly?

As a first step, you should know that consumer credit is a type of credit that only concerns individuals. Intended to finance a purchase: a new car, new equipment, work in a house, household appliances etc., consumer credit is granted by a financial institution and can be of different types.

For individuals, consumer credit often opposes the mortgage, contracted to finance the acquisition of real estate. Compared with home loans, consumer credit is characterized by lower monthly payments, a shorter repayment period and differs in the type of collateral required. In France, consumer credit is largely borne by specialized financial institutions and the sales process is heavily regulated by regulatory measures designed to limit overindebtedness.

 

There are two main types of consumer credit

There are two main types of consumer credit

Earmarked and unallocated. Affected consumer credits relate to credits related to a particular purchase while unrestricted consumer credits are not tied to a specific purchase. The borrower then freely has the amount borrowed. These are Personal Loans, Revolving Loans, Purchase Option Leases (LOAs) and Authorized Overdrafts.

 

The main types of consumer loans

The main types of consumer loans

There are different types of consumer credit. Among the best known, the personal loan, which falls into the category of unrestricted loans. Here, the rates are fixed and the repayment is monthly. Only imperative, that the amount of the loan does not exceed the 75 000 euros.

The revolving credit, formerly known as the revolving credit, is replenished as the borrower repays it and provides the borrower with a reserve of money that he can use freely. The duration is fixed at one year, but can be renewed when necessary.

Rental with option to buy is a type of credit a little bit particular that only concerns cars. This type of contract, also called “leasing”, is generally used when financing a vehicle. The bank buys the vehicle that the borrower wants to use and leases it to the borrower. At the end of the contract, the user can become the owner of the vehicle in exchange for the payment of a price determined in advance.
Finally, an overdraft on a bank account is considered a consumer credit although no money has been lent.

 

How to obtain a consumer credit?

How to obtain a consumer credit?

To apply for a consumer credit, nothing is easier. As we have seen, different types of consumer credit exist and it is essential to differentiate them well before embarking on a project. Thus, you will be better able to find the consumer credit that best suits your needs.

Many financial organizations now offer their customers online applications. Simple and fast, online applications avoid you to move and allow you to move forward in your project at your own pace.

Be careful, however, it is important or even essential to compare the banks between them. Now, several credit comparators online are available and allow individuals to see more clearly. This tool sorts the innumerable propositions and presents to individuals the offers most adapted to their research. The credit comparator also offers the possibility of performing a credit redemption simulation. Indeed, if you already have one or more consumer credit, collect them in one can avoid over-indebtedness.

 

Apply for a consumer credit

Apply for a consumer credit

The easiest and fastest way is to apply directly online. Some questions will be asked and will help the organization to better understand your personal project. Supporting documents may also be requested (identification, pay slips, credit in progress etc.) to judge your ability to commit and pay your monthly payments. Once these documents sent directly via the Internet and the consumer credit application made, the organizations will not delay responding to you. Now you have to make the right choice. top

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