You want to subscribe to a consumer credit, but are lost among the rates offered by organizations? Discover here what rate to take into account
Consumer credit is progressing at the beginning of 2017. The return of growth, the decline in household debt and especially the improvement of the morale of the French contribute strongly to this development.
However, caution against credit remains in place even if the crisis seems to have passed. The loan has a cost and it is important for every consumer to reduce it to the maximum. The goal is to find the most advantageous rate for his loan.
Which rate to take into account?
The consumption credit rate to be taken into account is the Annual Effective Rate (APR). It is always indicated in a loan offer and is composed of:
- the nominal rate that represents the direct cost of the loan
- the registration fees and / or the processing of the credit file set by the creditor
- the cost of different insurance.
The APR is capped at the rate of wear calculated each quarter by the Banque de France. In the first quarter of 2017, the rate of wear was 19.96% for a loan less than or equal to 3000 €, 13.25% for a loan between 3000 and 6000 € and 6.65% for a loan over 6000 €.
Usually, the APR is determined by the lender according to the amount of the desired loan, the solvency of the borrower and the guarantees provided. In the negotiation that will take place between the two parties, the borrower must generally aim for a low rate.
Low or below average market consumption credit rates
The ideal is to have the lowest credit rate on the market for your loan. This requires using an aggregator or comparator offers after deciding the type of loan most suitable for your project. We distinguish between consumption credit, depreciable loans and revolving credit. For depreciable loans, we have:
the personal loan
Very popular, it is found in credit agencies under the name of cash loan, project loan, need money etc. It is issued without justification for its subsequent use at rates very different from one lender to another but in general they are between 2 and 5%.
Rate advice: aim for the offer with the lowest rate coupled with a relatively short maturity period.
the work loan
It is a loan that allows you to carry out renovation or landscaping (terrace, parquet, pool …) in your home. The rates of this credit consumption are generally lower than those of personal loans with higher amounts.
Rate advice: aim for the offer with the lowest rate.
The car loan is intended for the purchase of car, motorcycle, camper etc. Auto credit is often offered with insurance adapted to the vehicle. Insurance is cheaper for a new vehicle and is essential, especially for used vehicles.
Rate Tip: Aim for offers that offer the best insurance coverage with a relatively low credit rate.
It makes it possible to group different credits into one, to reduce costs while extending the repayment term. Their rates in general are higher than those of conventional loans.
Rate advice: aim for the lowest rates based on the total loan term. For example, for the same loan amount, 6% over 6 years is better than 4.5% over 10 years.
Case of revolving credit
The revolving credit is often associated with a credit card. It is a reserve of money whose rate can vary over the duration of the loan.
Tip rate: for amounts below € 5,000, the revolving credit is often more advantageous than a depreciable credit. Aim for the lowest credit rates with short maturities.
In any case, pay attention to promotional offers especially for revolving credits. Be sure to terminate your loan agreement before the end of the promotion period to avoid the return of high rates.