Consumer credit

Discover consumer credit with

Other names of consumer credit:
- Ready for consumption
- Consumer credit
- Money reserve
- Revolving credit

Unlike the amortisable credit (also called personal loan) whose outstanding capital as well as the interest on the loan decrease as the monthly loan payments are made, consumer credit is a credit authorization for which the ceiling is determined by the initial credit agreement. This type of credit works like an overdraft authorized by your bank. The capital repaid with each monthly loan payment can be reused to make other purchases.

- Its duration is initially 1 year renewable since 2011 and following the Lagarde Law, consumer credit cannot exceed 36 months.
- The amount varies from € 500 to € 21,000, but given its generally high interest rate, consumer loans taken out are generally less than € 5,000.
- Taking into account the possibilities offered, consumer credit generally has a higher rate (around 17.9%) while a classic amortizable credit (personal credit) is generally between 5% and 7%.
- Apart from possible guarantees for the highest amounts, no specific guarantee is requested for consumer loans of small amounts. The credit organization was very little looking at the debt ratio of the loan applicant to consumption, but since the arrival of the Lagarde law in 2011, the financial body has the obligation not to grant this type of loan to the most financially fragile households.

Our opinion on consumer credit:
Consumer credit can be very useful for purchasing household or computer equipment, clearing bank overdrafts, paying taxes, paying for unforeseen expenses, and more. For the acquisition of consumer goods one can obtain a consumer loan from a financing organization or directly from most traders. Those who have these consumer credit offers do not hesitate to offer them to facilitate sales, sometimes neglecting to alert consumers to their debt capacity.
The risks of consumer credit are real and lie essentially in the temptation of constant and systematic use.
Using this facility in moderation and with knowledge of its repayment capacities can prove to be very useful and simplify the purchase or some financial unforeseen events.

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