When you plan to acquire a property or provide a service, you can use a consumer credit. It can be used for example to finance the purchase of a new car, a television or a trip. Its amount is between € 200 and € 75,000. There are three types:
- The personal loan, with which the borrower can dispose of the credit amount as he sees fit.
- The revolving loan, usually with a credit card, the amount of which constitutes a reserve that the borrower can also use freely and which is reconstituted over the repayment.
- The assigned loan, which in turn is linked to the purchase of the goods or services mentioned in the credit agreement.
The cost of the assigned loan is often lower than the cost of the revolving loan or personal loan. This is because the lender is paid according to the risks he takes. In the case of an unallocated loan, the lender does not know how you will use the credit amount and therefore has fewer guarantees regarding the non-repayment of the loan.
How can I get an assigned loan?
The assigned loan is used only to pay for the goods or services specified in the contract. The sales contract (between the seller and you) and the credit agreement (between the bank and you) constitute a single commercial transaction. When a seller offers to pay your new laptop in three installments, this is the type of loan that is granted.
In general, the assigned loan is offered directly at the point of sale, for example a merchant site, a travel agency or a car dealership. It is also possible to ask your bank or a credit institution.
The lender (or the seller if you are at the point of sale) will provide you with a pre-contractual fact sheet. It contains all the information you need to make an informed decision. Among others (for a complete list see article R311-3 of the French Commercial Code):
- The identity and address of the lender and, if applicable, the identity and address of the credit intermediary (the seller, if the solicitation of the credit agreement is made at the point of sale)
- The type of credit (loan allocated)
- The total amount of the credit and the conditions for making the funds available
- The borrowing rate and the conditions applicable to this rate
- The amount, number and frequency of maturities that the borrower has to pay
- The total amount owed by the borrower
- The good or service for which the loan is assigned and its cash price
The credit institution will check your creditworthiness with information on your personal and patrimonial situation that you have been asked to provide. If the amount of the loan allocated is more than 3000 € you will need to provide proof of address, proof of income and proof of identity. He must also consult the National Register of Personal Credit Reimbursement Incidents (FICP).
The affected loan provides good protection for the borrower because its obligations to the bank and the release of funds begin only when the product is delivered in good condition. If the product is not delivered or defective, the sale is canceled and the loan too.
Most of the time, the amount of the loan allocated is not made available to the customer on his account, as would be the case for example for a personal loan. It is paid directly to the seller. If this is the case, in case of cancellation of the sale it is the seller who will return the loan amount to the lending institution.
How can I cancel an assigned loan?
First, it is forbidden for the lender to issue the funds the first seven days. There are two cases where the contract is resolved (ie it is not executed), without any compensation from you. The first case arises if the bank has not informed you of its decision whether or not to grant the affected loan within seven days of signing the credit agreement. If you have not received an answer after this time, the request will be rejected and the sales contract will not be executed.
The second case is when you exercise your right of withdrawal within the same period of 7 days. If you have applied for an immediate supply (without waiting for the end of the withdrawal period) of the good or service, this period is three days. Of course if a deposit had been paid, the seller is obliged to reimburse you on a simple request from you.
If you have been denied the loan, you may forego the purchase of the property or the service or you may decide to pay it in cash if this is possible for you, but there is no commitment to your part in this sense.
In order to exercise your right of withdrawal, a slip provided for this purpose is attached to the credit agreement. You must send it to the credit institution duly completed, dated and signed, within 14 calendar days from the signature of the contract. The day of the signing of the contract counts within this period, and there is no extension if the last day of the deadline is a Sunday or a holiday. This withdrawal period is mandatory, no clause in the credit agreement can make you give up.
In the event that the detachable withdrawal form is not provided with the contract, you can send a registered letter with acknowledgment of receipt to the lending institution. The letter must be handwritten, dated and signed and must include your first and last names, the amount of the loan assigned, its date of acceptance, and you must also specify the property or service to which the loan was assigned and the name and city of the seller.
Beyond the first seven days, the lender may pay the funds. In the event of withdrawal, you repay the paid-up capital by the credit institution and pay the accrued interest for the period between the payment of the credit and its refund, and this within thirty days from the notification of your withdrawal to the lender. Interest is calculated in relation to the lending rate set by the contract. You owe no compensation to the lender. In addition, you do not have to provide a reason if you make the decision to retract, and the credit institution is not entitled to save it on a file under penalty of a fine.
How is the repayment of the loan affected?
You start repaying the loan only from the delivery of the goods or the supply of the service. In the case of a sales or performance contract, your refund starts from the beginning of the delivery and ceases in case of interruption.
The signed receipt of your hand is sent to the lending institution by the seller. This voucher proves that the delivery has been made and the funds are paid to the seller. If the lender asks you to start repayment of the assigned loan before delivery, refuse and ask him to provide you with a photocopy of the delivery note.
You have the option, if you wish, to repay your pre-arranged loan in part or in full. In this case, the lender may ask you for an indemnity that may amount to 1% of the amount of the prepayment if it exceeds € 10,000, and 0.5% if it is lower.
If you do not pay the repayment payments, the lender may demand immediate repayment of the outstanding principal plus unpaid interest. Until the effective settlement date, the amount payable pays interest at the same rate as the affected loan. The lender will also be entitled to claim a late payment which will depend on the remaining term of the contract.
It is therefore advisable, in case of difficulty of payment, to prevent the credit institution as quickly as possible without waiting for the situation to become uncontrollable so that you can arrange your repayments together. Make him a redevelopment proposal by showing him proof of your financial difficulties. If he agrees, ask for a written confirmation of the redevelopment. If he claims an indemnity, he can not exceed 4% of the amount of the remaining installments to be paid.
If you can not find an agreement with the lender you can make a request to the judge of the district court of your home. It may reschedule the payment of your monthly payments or suspend them for a maximum period of two years.
In the event of a change in the borrowing rate during the repayment of the assigned loan, the lender must notify you before the change takes effect. It will give you the new amount of maturities and, if necessary, changes in the number or periodicity of maturities.