Credit is today a solution to access to wealth particularly democratized in our societies and is no longer an exception to the norm. Everyone now can subscribe to a loan that it is a consumer loan, a loan to real estate or even a credit for a specific business project. If we add to these financial products agencies offering credit buy-backs, revolving loans and micro-credits, the loan market has really become commonplace and is fueling a thriving sector of activity.
The revolving credit or revolving credit or reconstitutable credit is a loan with a predefined amount that is reconstituted over the repayments and the amount can be reused as and when the loan. The term of the revolving credit is one year and can be renewed every year. APR – Annual Total Effective Rate – is recalculated annually and may be higher than for a typical loan. After three years, the creditworthiness of the borrower is checked again. A specific bank card is assigned to the borrower to sign the contract. This financial device is defined by the Hamon law defining the 2014 reform of the consumer code.
A loan remains an official gesture
It is where the identity of the borrower is required and documents justifying a certain number of elements on the latter are mandatory and requested by the financial organizations. Credit therefore always begins with the constitution of a file. On the other hand, the credit without proof does exist. To what extent can credit be without credentials?
The supporting documents required for all types of credit, including revolving credits without proof, are an identity document, a bank account statement and pay slips, generally dating from the last three months. Some financial institutions will be able to do without pay slips but this is rare and a form of guarantee – a third for example – will be requested or required. Credit without proof does not derogate from the rule. In the constitution of the file can even be added the bank statements of the last three months which will justify the banking behavior of the borrower. The savings capacity will also be measured as well as the debt ratio, which means that the borrower’s repayment capacity is calculated based on the loans already in progress. A stable job (permanent job title, high hierarchical function, for example) will be an asset. Finally, it is important not to be stuck at the Bank of Rose, because it is much more difficult to obtain a loan in a situation of banking prohibition.
The credit without proof is a credit requiring the constitution
A file but no justification of use, in opposition to the appropriated credit which has a well defined use at the time of the constitution of the file. The most obvious example of credit affected is the mortgage where the mounting of the file includes the purchase of a property and a well-defined amount. The term “revolving credit without justification” does not concern the assembly of the file but the purpose of the loan which remains free with regard to the use. The borrower is allowed to use his credit in the desired way however he will still have to justify the nature of his loan, to a certain extent. Credit without proof remains a type of personal loan whose purpose is the consumption of good.
The amount of the revolving credit without justification is between € 200 and € 75,000, however the amount of the loan depends mainly on the borrower’s income and its repayment capacity. The total amount is paid to the borrower at one time following the signature of the loan. The revolving credit without proof is always a minimum of one year. Depending on the borrower’s financial situation, especially if the borrower owns real estate, the bank may extend the term of the loan.
One of the main features of personal revolving credit without proof is that it is not tied to a particular good. So, as soon as the credit is signed, even if the property is not delivered – for example a car that you buy from an individual – the borrower is required to repay it and the money is paid to him whatever happens. Indeed, to commit with a credit without justification imposes a refund and the capacities of refund can rarely exceed 33% of the total amount of the incomes of the borrower.
As with an assigned credit, early repayments are possible, if you have an unplanned cash flow that you want to use to repay the loan. For loans of less than € 10,000, no prepayment will be applied most of the time. Beyond this amount, charges between 0.5% and 1% will be applied depending on the contract between the organization and the borrower. These fees may be part of the negotiation with the borrowing agency for the purpose of signing the credit agreement.
Insurance is not an obligation
In addition, thanks to the Layla Leggid if the borrower wishes to take out insurance, he can do it with another bank or another institution and he is not now obliged to subscribe to the insurance of the lending organization. The TAEA or Annual Effective Rate of Insurance allows to know the annual and monthly amount to pay with the insurance taken out. Most organizations include it in their proposal. The borrowing rate, or APR rate – Global Annual Effective Rate – remains fixed during the term of the loan. The deadlines are also constant and equal and they must be repaid regularly. However, it is possible to stop for a period of time the deadlines in case of difficulty of payment. On the other hand, the duration of the loan is increased and additional fees may be imposed.
Organizations granting revolving loans without proof are plethora. Indeed, it may be a bank but also a financial institution or a bank loan broker. An enlightened comparison of the different proposals is often necessary. Many of these organizations now offer online quotes and simulations, available in a few clicks, without any commitment or supporting documents.
These only work with a specific and limited type of brand and are offered by the stores in partnership with a bank or financial institution. You can only use them with participating stores.
Cards accepted by all brands
The banking organization signs an agreement with several companies to accept the card and you can use it in the list given in the revolving credit agreement.
Cards that work like a bank card
These cards work in all the signs and allow to pay any type of product like a classic bank card, always without any justification.
The revolving credit is a provision that allows you to have at your disposal a sum of money usable in several times. Refunds are calculated as soon as an expense – a line of credit – is made by the borrower and the rates for the portion of the credit used will vary from year to year. Refunds are fixed or flexible and make it possible to refund the money used, the insurance taken out and the interest due for the month.
Personal revolving loan is a free loan
To conclude, the non-exchangeable personal revolving loan is a free loan that makes it possible to quickly use funds, on file and with guarantees, for an undetermined purpose and with relative flexibility. However, it should be noted that for some goods, including vehicles or homes, there are also many options: home loans and credit balloon and LOA (lease with option to buy) for vehicles. Choosing the right credit, before comparing rates, is also an important option. Even if now finance gives the possibility to have access to a sum of money that can become substantial without expressed purpose, the analysis of the need sometimes makes it possible to define a more interesting choice. Finally, it turns out that in France, the majority of over-indebted people have to their credit one or more renewable loans.