The personal loan is one of the solutions that allow you to realize your projects quickly. Whether you want to organize your wedding, get funding for your next vacation or do some work to beautify your apartment, the personal loan can help you quickly achieve your desires.
It should be noted, however, that like any contract, the personal loan involves a repayment whose total cost is based mainly on the interest rate applied. It is therefore important before subscribing to a loan to determine its rate.
The rate of a personal loan
In general, the personal loan is a loan that has a fixed rate often lower than that of consumer credit. Like the traditional loan, the personal loan allows the borrower to obtain at one time, the total amount of the loan. As a result, the personal loan can allow many households to obtain financing for the completion of certain works ( loan work ), the purchase of a vehicle ( Simulate your car credit ), the realization of a project family holidays or simply the constitution of a treasury.
Personal loan and its benefits
The personal loan also has the advantage of allowing a borrower to benefit from a loan without providing proof. A person wishing to subscribe to a personal loan will however have to expect a fee and a rate that will determine the total cost of his loan. Among these costs are those which are fixed at the time of the interview and indicated in the credit agreement: these expenses often concern the administrative and service charges that the drafting of the credit agreement has incurred.
As far as the rate is concerned, an APR must be mentioned on a personal loan offer: this rate generally includes the interest rate of the loan, also known as the nominal rate, the handling fees that are paid when the loan is set up., the premiums relating to death-disability or temporary incapacity insurance calculated with the monthly installments of the loan, the expenses of guarantee and the various commissions…
In the case of a fixed rate, the APR indicated by an offer of personal loan must not exceed the statutory rate of wear and tear that the Banque de France has imposed. At present, the rate of a personal loan varies between 2.5 and 15%, depending on each institution that offers the loan. The repayment term may also have an impact on the value of the interest rate.
Generally speaking, when the borrower chooses to repay on a shorter term, the interest rate is lower: on the other hand, the monthly payment to be paid periodically will be higher. In the opposite case, in case of long-term repayment, the interest rate is higher while the monthly payment is less important.
Personal Loan Rate Act
A new implementing decree was announced in the Official Journal of 3 February 2011 regarding the calculation of the APR.
This decree indicates the obligation of each institution offering a credit to mention the APR on all advertisements, fact sheets or loan agreements to be signed, in order to enable borrowers to concretely assess the cost of a personal loan. to which they subscribe.
Today, those wishing to have an overview of the costs incurred by different personal loan offers can use online rate simulators. In addition to giving information on the interest rate, online rate simulators can simulate your loan and identify very quickly the personal loan formula most suited to your budget and project.