The personal loan is a consumer credit that can be granted by a bank or institution specializing in consumer credit. It is a credit whose particularity is that it does not require proof of use. This means that a person signing a personal loan agreement can dispose of the borrowed amount as they wish, without having to justify their purchases to the lender. It is a loan that can be used to finance any type of expenditure, be it, for example, a piece of equipment or a trip. This is how it differs from the assigned loan, which is linked to the purchase of a specific good or service.
The personal loan rate can be freely set by the lender, being careful not to exceed the usury rate, which is the maximum rate applicable for loans. It is updated regularly according to the average rates charged by the various lenders and can be checked on the Benner website. Depending on the different lending institutions, it is possible to borrow up to 75,000 euros. The method of repayment and the duration of the contract are variable but in general, it is done in monthly installments and the contract can not exceed 7 or 8 years.
There is mandatory information that is to be communicated by the lender to the borrower, before signing the contract. This includes the identity of the lending organization and its address, the amount of the loan as well as the conditions for making available the amount borrowed, the repayment period, the number and periodicity of monthly payments, the total amount to be repaid. , the cost of the application fees, the APR (annual percentage rate of charge), the indemnities in the case of late repayment. The lender must also inform the borrower about his right of withdrawal (which is 14 calendar days after the signature of the contract) as well as laws concerning the period of validity of the offer but also the minimum period of reflection.
How to apply for credit online?
To apply for a loan online, you must first choose the bank or credit institution to contact. For this, you can use an online credit comparator that will allow you to have an overview of the different offers on the market so that you have the opportunity to choose the one that suits you best. Once you have chosen the lender, simply fill out an online questionnaire and fill in the information you need to know if you are eligible for the credit you want to buy. This includes information about your family, work and banking situation. Then you will receive an answer in principle, usually immediate, based on the declared elements. If this answer is favorable, the lender will send you a loan agreement that you will have to date and sign, then return it to him. In addition, although the personal loan does not require proof of use of the amount borrowed, you will still need to provide the lender with the documents justifying your personal situation. You will have to attach them to the contract and send them back to the financial institution so that the study of your file can be finalized. This includes documents proving your identity and your domiciliation, your professional situation as well as your banking situation.
Advantages and disadvantages of a loan
A loan is a simple, fast and flexible solution. It can meet specific needs and freely finance any type of project, without having to justify the use of borrowed capital. It can allow you to dispose of this amount as you see fit, which is very convenient in the case where the loan is not intended for a specific purchase. It is a credit that can be personalized, by choosing the duration of the contract as well as the monthly payments according to your situation. You can also repay the credit in advance, in part or in full. The duration of the credit and its rate are fixed, which reduces the risk of over-indebtedness compared to other types of loans such as revolving credit.
However, there are also some disadvantages. If you ever want to use this loan to finance the purchase of an object and a problem arises with the sale, the repayment of the credit will still have to be made. This is not the case when an assigned loan whose contract is automatically canceled if the sale is not completed or if the object and defective. In addition, the interest rate of the personal loan is often higher than that of an affected loan because the lender does not have a guarantee related to a specific purchase. For the same reason, acceptance rules are often stricter.