How do you know if you need a consumer loan?

Need cash to buy a car, advance a security deposit and the first rents of a new rental, finance work, a child’s studies… So many reasons to use consumer credit as you want to keep your savings. All you have to do is find the method of financing that best suits your needs.

Ready for consumption, in which cases is it useful?

Consumer loans are granted to individuals for non-professional needs and not intended for a real estate purchase . The amounts range from €200 to €75,000 depending on the credit organizations. and must be repaid in installments over a period defined in advance. They are divided into two main types: assigned credits for the purchase of a specific asset and unassigned credits such as personal loans and revolving credit.

Let’s review the type of loan best suited to your needs to limit the cost of credit. This will mainly depend on the interest rate and the repayment period.

Credit assigned to buy a car

A loan allocated to the acquisition of a vehicle is a fairly common loan solution. To benefit from this type of loan, you must justify the purchase of the property with invoices or estimates. This type of contract is usually offered by the dealer through a credit company. The interest rates offered are often higher than those you would find from your bank or financial institution.

There is interdependence between the sales contract and the credit contract: ie the purchase and the loan are linked. In practice: You only start reimbursing after your purchase has been delivered.

If you do not obtain the credit or if you exercise your right of withdrawal, the purchase is canceled (if you indicate on the order form that the purchase is financed on credit). Conversely, if the purchase fails, you will not have credit to repay.

The personal loan to meet unexpected expenses or pleasure

Car to repair, want to make a nice trip or finance your wedding … or all three, opt for a personal loan.

It falls under the category of unallocated appropriations. It is granted to cover temporary cash requirements without being allocated to a particular purchase . Everything is fixed at the start: the capital borrowed, the repayment period, the amount of the monthly payments. Funds are disbursed all at once.

Its cost is often lower than a bank overdraft or a revolving credit.

In some cases, a personal loan can be used to consolidate several consumer loans, in order to have only one interlocutor and obtain lower monthly payments. This solution requires an in-depth study of your situation in order to be certain that the operation will reduce the total burden of your debt.

A loan for work

You can finance the work and equipment of your home with a work loan offered by certain organisations. This loan has the particularity, unlike other consumer loans, of being able to exceed €75,000 if it finances expenses relating to the repair, improvement or maintenance of a residential or professional building and housing provided that these operations are not guaranteed by a mortgage or a comparable surety.

Two variations: as an assigned loan or as a personal loan.

Obtaining the affected loan will require the presentation of invoices to justify the amount to be released, but its rate will, in principle, be lower than the rate of the personal loan.

Attention, the subscription of a credit commits you. In the event of the death of the borrower, he will have to be reimbursed by the heirs if you have not taken out insurance.