Consumer credit: personal loan
Verified 03 March 2020 - Directorate for Legal and Administrative Information (Prime Minister)
The personal loan is a credit, the amount of which you can use as you wish. It differs from the personal loan affected and the real estate loan, which are intended for the purchase of a particular property. You can apply for a personal loan from a bank or credit institution. The lender must inform you of the importance of your commitments and of your right of withdrawal. He cannot ask you for any payment before the contract is signed.
You can use the amount of the credit as you see fit. Whether it's to buy a consumer good or any other benefit.
You do not have to use it exclusively for the purchase of a specific good or service, as in the case of a earmarked credit.
The amount of the consumer credit must be between €200 and €75,000.
The duration of the credit must be longer than 2 months.
The rate of this credit is freely determined by the creditor (bank or credit institution), as well as the repayment terms.
Application fees may be added to the cost of the credit. The amount varies from one establishment to another.
You can apply to the lender of your choice.
Your bank can issue this type of credit, but you can also contact a credit institution. Brokers can help you compare the best deals with a commission on the money borrowed.
The lender may refuse to grant you a loan if they believe there is a risk to your repayment capabilities (low income, on-loan employment). He is free to give you the credit or not according to his own assessment of your situation. Each lender sets its own terms and conditions.
The lender may require you to take out insurance before granting you the credit, even if the law does not require it. In the event of a payment incident, this insurance will reimburse you. The lender must inform you of the possible cost of the insurance, using a quantified example expressed in euros and per month. They can offer you their own insurance, but you are free to go to the insurer of your choice.
to check your situation, the lender can have access to bank files.
Before signing the contract, the lender (the bank or the credit institution) must provide you with the information that will enable you to know whether the credit is suitable for your needs and financial situation.
The lender must obligatory provide you with all of the following information:
- Identity and address of the lender
- Type of credit (earmarked credit, staff, renewable...)
- Amount of credit and conditions for making available the amount borrowed
- Duration of the contract, number and schedule of refunds (per month, every 2 months...)
- Total amount due
- The total cost of the charge, expressed as a specific amount
- Annual percentage rate of charge (APR) (except in case of rent-to-own), with explanations of how this rate is calculated (expressed as a percentage of the sum borrowed)
- Compensation payable in the event of late payment
- Existence of a withdrawal period : you have 14 calendar days to give up your credit after the contract is signed
- Articles of the Consumer Code on the period of validity of the offer and on the minimum period for reflection
- Your right to obtain, on request and free of charge, a copy of the credit agreement offer
- In the case of an assigned appropriation, the property or service provided is financed
No payment may be required by the creditor before the signature of the prior credit offer.
You begin to repay the credit only after the expiration of the withdrawal period and the entry into possession of the sums lent.
If you have trouble paying back your monthly consumer credit, you can do the following:
- 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 provided for in the insurance contract (for example, sickness, disability, loss of employment)
- Ask the financial institution that gave you the credit for any extension or delay in payment. The lender is not obliged to grant you these facilities.
- Ask the judge for a grace period, i.e. a suspension of repayments for a period of up to 2 years, without surcharges or penalties for delay. You will have to build a file with the documents that attest to your difficulties (resources, charges and reimbursements in progress in particular) and bring your home before the competent court.
- Drop a over-indebtedness record, if your difficulties are significant and lasting