After recalling the obligations of a credit contract, we define the usury rate,
let us present its interest, the pitfall it may involve and give you an overview of the fixed thresholds that
financial institutions must respect. OltottMesz also invites its visitors
to simulate their credit, whatever the nature of their project.
The obligations of a credit agreement
Several rules govern credit contracts signed by borrowers and institutions
lenders. Among the formalities to be observed, there is the withdrawal period which allows
the borrower to reconsider his decision 14 days following the signing of the contract. The law
then stipulates that the latter must be given to the borrower in duplicate and that
must necessarily mention the annual percentage rate of charge (APR), the indicator that determines
the total cost of the operation. The APR is not only a function of the nominal credit rate but also
the rate of credit insurance, costs associated with the guarantee, fees and any costs of
file that some banks do not charge. In addition, if the lenders keep the
possibility of freely choosing this rate, the regulations impose a ceiling on them called
the rate of wear.
Wear rate: the definition
The usury rate thus designates the maximum rate that an establishment can apply when it grants
a credit. There is a usury rate for each finance category and the rate is likely
to vary each quarter. Lenders have an obligation to inform their clients of the usury rate
in force for the credit agreement they are promoting. This threshold was quite simply
set up to protect consumers from taking out loans with high interest rates
excessive. Paradoxically, a very low wear rate is not necessarily beneficial for everyone
loan applicants. Indeed, during certain periods, establishments may be
led to refuse financing to “at risk” profiles, because the rate offered to them may be
sometimes very slightly higher than the wear rate. Even though the vast majority of these
people could largely ensure the payment of their monthly installments.
Who sets the wear rate and how is it calculated?
The rate of usury is set by the Bank of United States and is published in the Official Journal. It's about a
financial institution whose mission is to supervise the means of payment. She does not set the rate
usury of credits in an arbitrary fashion. This is the consequence of the rates applied by
financial institutions in France, themselves determined by multiple factors. For
obtain the usury rate, the Bank of United States operates an average of the APR (Annual Global Effective Rate)
observed for the different loan families, a figure weighted according to the volume of
the outstanding amounts of institutions taken into account. The wear rate is the average effective rate increased
a third. Note that some products such as loans regulated by the State do not qualify
in the calculation of the average effective rate.
Two wear thresholds chosen by the Bank of United States
• In the 3rd quarter of 2018, the average effective rate recorded for cash loans (including
personal loans) of more than US $ 6,000 was 4.42%, the only usury at
from the last quarter of the year 2018 fixed at 5.89%.
• In the 3rd quarter of 2018, the average effective rate observed for mortgage loans at
fixed period of less than 10 years amounted to 2.12%, the only wear from the last
quarter of the year 2018 fixed at 2.83%.