Consumer Credit – Subject to using it wisely

Granted by a credit institution or a bank, the affected credit is granted to finance the purchase of goods or services, determined at the time of signing. Affected credit can be a good solution to optimize your purchasing power. 

 

Characteristics of the affected credit

credit debt

The allocated credit is granted to finance a good or service determined at the time of subscription. Thus, at the time of signing the purchase order, the consumer specifies that his purchase is linked to obtaining the affected credit. Consequently, if the sales contract is not carried out, the cancellation of the credit contract will be automatic. Affected credits are often offered at the point of sale at the time of purchase, such as furniture stores, household appliances, car dealers.

 

Subscription of the affected loan

Subscription of the affected loan

The credit allocated complies with the rules for consumer credits . Thus, it begins with a phase of information of the borrower by the lender , during which the latter checks the creditworthiness of the borrower. The credit offer is then given to the borrower, who has a period to retract after signing. When writing the affected credit offer, the good (or service) financed must be specified as well as its cash purchase price. The subscriber has a document which specifies precisely the maturities of the loan, the amount of the monthly payments, as well as the annual effective annual rate (APR).

 

Amount, repayment and duration of credit

credit duration

The total amount of the credit must be greater than $200 and less than $75,000. In addition, the affected credit is granted for a duration of more than 3 months. No payment is due before the signing of the prior offer and before the expiration of the withdrawal period following the conclusion of the contract. Furthermore, as credit is linked to the acquisition of a specific good or service, there is a link between the sales contract and the credit contract which constitutes protection for the consumer. Thus the borrower only begins to repay from the delivery of the goods or the provision of the service. Similarly, in the event of a defect or non-delivery, the borrower may benefit under certain conditions, either from a suspension of the installments, or from the cancellation of the credit if the sale is canceled.

 

Precautions to take

Precautions to take

The consumer credit reform has strengthened the protection of borrowers . They now know that a loan commits them and that it will have to be repaid. The appropriations allocated are often very useful for balancing a budget, but the borrower must take care not to exceed the amount of monthly payments that he can assume. If this amount exceeds 30% of income, the subscriber can be drawn into the spiral of over-indebtedness . If you are in this situation, you can contact your Savers Creed Credits advisers who will be able to come up with a credit buyback solution for you. By replacing all your affected credits with a single renegotiated loan, you can lower your monthly payments, by extending the duration of the loan, and by simplifying your monthly budget with asingle monthly payment.

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