Do you need a deposit to get a consumer credit?
Verified 01 June 2021 - Directorate for Legal and Administrative Information (Prime Minister)
Bail is not required, but the bank may refuse to give you the loan if you don't have one. Surety is a person who agrees to reimburse the bank in case you cannot do so. The bond must be made by a written contract. It lays down the conditions under which the guarantor must intervene. The bank must inform the guarantor of the extent of its commitment at the time the loan is granted, and throughout the repayment period.
When you apply for a consumer loan, the bank may require you to have a bond before granting it.
Surety is a person who agrees to repay the creditor in your place, if you do not do so.
The level of surety's commitment depends on the type of surety chosen: simple or joint surety.
- In the case of simple deposit, on creditor must first initiate proceedings against the borrower before going to the person who is surety
- In the case of joint and several guarantee, the guarantor shall be liable to pay the debtor's debt as from 1er payment incident. This type of deposit is generally preferred by banking institutions.
Any natural person may act as a guarantor, even if he or she is not related to the borrower.
A legal person (specialist business, health mutual...) can also act as guarantor.
However, it is not possible to act as a guarantor for a borrower who does not have legal capacity (minor or protected major for example).
The guarantee must be made in writing which mentions the type of guarantee (single or joint), failing which it will be void. You can use the following template:
The guarantor must receive the credit offer by mail, as must the borrower.
The bank applying for a guarantee must check that the guarantor has sufficient means to enter into a commitment.
If the lender accepts a guarantee that is disproportionate to the guaranteed financial risk, he will not be able to ask him to fulfill the debtor's obligations. Unless the situation of the guarantor has changed and the guarantor has sufficient assets at the time when he is required to meet the obligation to provide a guarantee.
Obligation to provide regular information
The lender must communicate in writing to the guarantor, before March 31 of each year, the following:
- Amount of principal outstanding
- Amount of interest, costs and commissions outstanding as at 31 December of the previous year
- Ending date of his commitment
If the creditor does not communicate this information to the guarantor, the guarantor will be obliged to repay only the principal, without any interest or penalty for late payment due.
Obligation to indicate a regular APR
Credit institutions shall be obliged to provide the guarantor with a APRC: titleContent covering all costs incurred by the loan.
If the APR is not mentioned in the contract or if an incorrect APR is mentioned, the court may cancel the interest in whole or in part. In determining the amount of interest canceled, the judge shall take into account, inter alia, the damage suffered by the borrower.
The lender must inform the guarantor as early as 1er borrower repayment incident.
If he has not done so, the guarantor shall not pay penalties or interest for late payment due between the date of this 1er the incident and the date on which it was informed. You can use the following template if you are surety and the bank has not informed you as of the 1er reimbursement incident: