Consumer credit: specific purchase credit
Verified 30 October 2019 - Directorate for Legal and Administrative Information (Prime Minister)
The affected credit is granted by a credit institution or bank. It is used for a specific purchase: movable property (e.g. car loans) or a service. It is often contracted directly at the place of sale.
The credit is linked to a specific purchase: a good or a service. For example, a car loan or a credit to finance a television or a trip.
The credit obtained must be used only to pay for the defined good or benefit. If the contract of sale is not fulfilled (withdrawal on your part...), the cancelation of the credit agreement will be automatic, even if the institution has agreed to grant you it.
The assigned credit is granted and managed by a bank or credit institution.
Typically, the purchase itself and the credit request are made during the same transaction. The steps are then taken directly at the place of sale, or on the same website in the case of a remote purchase.
Appropriated credit shall comply with the general rules on consumer credit.
Thus, the lending institution must start with a information phase, during which he must check your solvency, to find out if you are able to repay the credit. When you buy remotely, some sites offer an immediate review of your situation.
If your credit application is accepted, the lender will give you their credit offer. This offer must specify the asset (or benefit) to be financed and its cash price. You must also receive a document that clearly states:
- Credit Maturity
- Amount of these maturities
- Annual overall effective rate (APR)
the contract of sale cannot require you to complete the purchase and pay cash (i.e., in one go) if you do not get your credit.
If you accept the offer and sign the credit agreement, you have withdrawal period of 14 calendar days after signing to renege on your commitment.
The seller must not deliver the goods to you or start the service before the end of this withdrawal period.
However, if you request it in writing, the seller may deliver the goods or provide services immediately or within 14 calendar days. We're talking about shortened time..
When the seller delivers the goods or provides a service within an abbreviated period, your right of withdrawal expires on the date of delivery or provision of a service.
When the seller delivers the goods or provides services immediately, you must exercise your right of withdrawal within 3 calendar days.
You can use the form provided with your credit agreement or mail template:
If the assigned credit agreement is not executed, the contract for the sale or provision of services shall be canceled, at no cost to the borrower.
This is the case:
- if the credit application is refused,
- or if the lender has not informed the seller of the granting of the credit within 7 days of the borrower's acceptance of the contract,
- or if the borrower exercised his right of withdrawal within the time limit.
in the event of cancelation of the sale for refusal of credit or withdrawal of the borrower, the seller may not require the buyer to pay penalties.
The total amount of credit must be between €200 and €75,000..
The credit must be granted for a period exceeding 3 months.
You will have to pay 3 monthly installments.
You start to repay only from the delivery of the good or the supply of the service.
No final payment may be required:
- prior to the signature of the advance credit offer
- and before the expiry of the withdrawal period following the conclusion of the final credit agreement.
the seller may charge a deposit to the order to reserve the property, and will have to refund it in case of withdrawal or if the credit is refused.
If you are having trouble paying off your consumer credit monthly installments, you have several options:
- Ask your insurer to pay monthly payments on your behalf, if you have taken out insurance for the credit, and if your difficulties arise from one of the circumstances set out in the insurance contract (for example, illness, disability, loss of employment)
- Ask the financial institution that has given you the credit to carry forward maturities or payment deadlines. The lender is not obliged to grant you these facilities
- Ask the judge for a grace period, i.e. a suspension of refunds for up to 2 years, without increases or penalties for delay. You will have to file with the documents attesting to your difficulties (resources, expenses and reimbursements in progress in particular) and to refer the matter to the court
- Drop a case of overindebtedness, if your difficulties are significant and lasting
If the bank or financial institution begins to collect the monthly payments before delivery of the purchased product, you can ask them to stop by sending them a registered letter with notice of receipt.
- Consumer Code: Article L211-1Definitions and scope of consumer credit
- Consumer Code: Articles L312-1 to L312-4Consumer credit
- Consumer Code: Articles L312-14 to L312-15Explanations provided to the borrower and assessment of his solvency
- Consumer Code: Articles L312-16 to L312-17Assessment of the borrower's solvency
- Consumer Code: Articles L312-28 to L312-30Information mentioned in the contract
- Consumer Code: Articles L312-44 to L312-56Allocated appropriations
- Consumer Code: R312-20Consumption appropriations allocated
- Consumer Code: R341-11