You are thinking about the personal loan to finance one of your projects. Here are 10 things to know about this form of credit.
Personal loans are part of the family of consumer loans. You can use it only to finance non-real estate. It is subject to the same basic characteristics as other consumer borrowings.
The peculiarity of the personal loan compared to the other form of consumer credit is that it is not allocated to a specific expense. Clearly, the amount you borrow with this form of credit allows you to finance any project as long as it is a consumer good. You can also spend this amount in several installments for different projects.
This rating is linked to the previous one, ie the fact that the personal loan is not allocated to a specific expense. So you do not have to justify the purchase (s) you will make with the principal loaned by the creditor. If for a credit allocated as of the negotiations your project must be well defined and the amount allocated to a specific purchase, this is not the case for the personal loan.
It can be used as a reserve
The fact that the personal loan is not affected also allows you to dispose of the money as you wish. One of the utilities of this type of credit is to serve as a reserve that you can for example place in the meantime on a savings book. As soon as you need it, you can tap into that cash.
Basic credit characteristics
The personal loan still meets the basic characteristics of any credit. The amount you borrow you must repay it. More precisely, this reimbursement must be made according to monthly payments defined during the negotiation of the contract and within precise deadlines. The amount borrowed is therefore divided into a repayment term divided into several maturities, generally one per month, during which you must pay your monthly installments.
Maximum Loan Amount
The personal loan is subject to a maximum loan amount of € 75,000. This amount is the same for the assigned credit.
More easily negotiable
In comparison with the appropriated credit, the personal loan is generally more easily negotiable. Since it is not tied to a specific project, the creditor will be more inclined to negotiate the different characteristics of the loan. Even if you know exactly which project you are going to finance, the personal loan is sometimes more interesting than an assigned credit.
Respect certain conditions
As with any credit, it is a commitment. Before lending you the money, the creditor will therefore ensure that you are able to repay the amount on time. It will study your professional situation, your income, your financial behavior (bank statements of the past 3 months), your savings capacity and that you are not registered with the Banque de France.
The revolving credit
There is a specific form of personal loan called revolving credit. Its particularity is to be able to be renewed according to certain conditions. Generally, once you have reached a certain repayment threshold, you can renew your loan without having to re-apply. A solution that can be very practical, but it should not be abused.
The online loan
Like many credits, it is now possible to subscribe to a personal loan directly on the internet. This solution often proves faster and cheaper. However, be sure to refer to recognized and certified credit institutions because it is easier to be scammed on the internet.