Consumer credit: formulas and regulations in force
The consumption credit is intended for the purchase of current goods and equipment for non – professional use. Loan capital is generally lower than for a home loan. The Consumer Code applies when the amount is less than or equal to € 75,000 and the duration exceeds 3 months.
The regulation on consumer credit is particularly strict and the various laws Neiertz and Scrivener, reinforced by the reforms Lagarde and Hamon protect the borrower. This is all the more useful with the appearance of online banks that can subscribe in minutes.
The different formulas
The personal loan
This is the traditional depreciable loan offered by most network banks. It can be assigned , that is to say intended to finance a property in particular (auto, work …) or unassigned , that is to say used freely by the borrower.
The money reserve
The official term is revolving credit. Even strictly regulated by the public authorities, it continues to wreak havoc in low-income households for which it remains the main cause of over-indebtedness. Use with great caution, especially if the situation requires urgent action.
Loans between individuals
Until now the offers of loans between individuals presented a risk in view of the many traps set by scammers of all hairs, whose task is facilitated since the arrival of the Internet. With the arrival of Prêt-d’Union, the loan between individuals has secured. It is the only body authorized by the Prudential Supervisory Authority (ACP). The praise given by the financial press and the solid shareholders (Crédit Mutuel, AG2R la Mondiale …) make it a serious interlocutor.
Law No. 78-22 of January 10, 1978 called Scrivener 1
This was the first law that actually protects the borrower. It applied to loans of less than € 21,500. It imposed on the lending agency a stricter formalism which was characterized mainly by:
- The sending of a preliminary offer in writing
- The indication of the overall effective rate , which includes all the costs related to the credit.
- A withdrawal period of 7 days.
The Neiertz Law on over-indebtedness
Law No. 89-1010 of 31 December 1989 has been largely repealed and there is virtually no text in force. They have been greatly strengthened since the enactment of the Neiertz Law . It has been essential in protecting the weakest households and combating over-indebtedness by instituting a friendly settlement procedure managed by a study commission attached to the Banque de France.
Lagarde reform reforming consumer credit
Promulgated on July 1, 2010, the Lagarde reform certainly did not go as far as would have been the desire of consumer associations that constantly criticize renewable credits. It is, however, an important step forward in protecting the weakest households. It is she who liberalized the market of the insurance borrower by allowing to subscribe the guarantees with the insurer of its choice.
It instituted the APR , a specific indicator of consumer loans. One of the difficulties of applying the Lagarde Law is the lack of control over the revolving credits offered by major retailers. Indeed, despite the prohibition to associate a payment card to a reserve of money, the latter sometimes continue to combine the two services.
The Hamon Law
Promulgated on March 17, 2014, this latest law on consumer credit strengthens the means of consumer associations by introducing the concept of group action. Like the “class action” in force in the United States, borrowers can band together to defend their rights against a bank. Moreover, UFC to choose was quick to use this legal device since it comes to bring you an action against the group Foncia to claim the reimbursement of fees notice of maturity for more than 300 000 tenants.
In its chapter aimed at fighting over-indebtedness, the Loi Hamon goes further than the Lagarde reform by obliging the lending organization to transmit an alternative preliminary offer to any revolving loan proposal and no longer to be satisfied with a simple proposal of spare.