Aimed at individuals for the financing of personal projects, whether imperative or optional, the personal loan is in the category of unrestricted credits and amortizable. As a loan, it is not granted free of charge. Thus, financial institutions apply different rates depending on the credit.
The rate will somehow fix the price of a loan . For personal loans, this rate generally does not vary. However, variations can sometimes occur over time.
Ins and outs of the personal loan
It is one of many credits in the arsenal of banks or credit agencies to meet the diverse needs of their clientele. As unrestricted credit, personal loan funds can be used by a person to finance the purchase of services (studies, wedding receptions, travel, work, etc.) or goods (televisions, furniture , appliances, etc.).
Being able to be freely spent, the loan can thus contribute to the financing of a certain number of projects simultaneously. And what is there or not? It can also rise up to 75,000 euros.
The repayment terms will have to be specified in a contract in order to eliminate any risk and allow the borrower to put in place an adequate budgetary management. This credit is subject to the law .
Rates in effect
The personal loan is one of the most offered and used financial services. In fact, all banks (and other more or less conventional organizations) display it in their range of offers. The rates applied for these offers vary widely from one institution to another with a minimum of 1% up to 16%.
This rate is calculated based on the amounts involved. The higher the amounts, the higher the risks and the higher the rate. This logic also applies to the duration of the loan. The longer it is, the higher the risks associated with an uncertain future, the more the bank will penalize the borrower with a high rate.
Finally, the profile of the borrower also has a role to play, including your history. To counterbalance this upward trend, you should know that promotional offers are developed throughout the year by professionals. It will however be necessary to read carefully the terms of the contract.
As a result, it will be necessary to be particularly vigilant when making a choice. As the rates are fixed throughout the loan, an unfavorable rate at the beginning can prove to be very penalizing in the long term.
However, this rate stability is generally excellent news as it will be very easy to set up a repayment plan in advance. For example, a loan of 15,000 euros, repayable in 1 year, will be averaged with a rate of 2.42%.
The personal loan presents a small inconvenience. On the contrary, it does not lack benefits. As the borrower can spend his credit at his discretion, the extreme flexibility of the latter makes it particularly suitable for urgent consumer needs.
Where allocated credits can only be used for one specific project. In addition, the conditions for obtaining personal credits are significantly less onerous than an assigned credit, especially since a guarantee is not necessary. Add to that the security provided by the fixed rate, and with the reduction of the risk of over-indebtedness, and personal credit is one of the best financing solutions.
Nevertheless, it is still essential to check its ability to repay before taking out a loan. A loan linking you until the repayment of the last monthly payment, it would be unfortunate to engage you to find yourself in default. In addition, be aware that it is forbidden to claim any refund until the loan is paid to you.