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Consumer credit: revolving credit

Verified 09 December 2019 - Directorate for Legal and Administrative Information (Prime Minister)

A revolving credit card is a credit card based on a special consumer loan, called revolving credit, permanent credit or repayable credit.. It is characterized by the freedom you have in the use of capital and in the repayment. This credit is offered by a financial institution or a shop. They should check whether you are able to repay the loan, and inform you of the scope of your commitments.

Revolving credit is also called revolving credit, standing or repayable credit..

It consists in the lender making available to you a sum of money, which you can use, in whole or in part, to make purchases, in one or more times.

However, the credit must not exceed the maximum amount allowed.

The available credit is replenished as you repay, up to the maximum amount allowed.

You only repay interest on the amount you used, and therefore actually borrowed, and not on the available credit.

Each maturity paid by the borrower must include at least a small share of the borrowed capital. And the repayment periods must not exceed certain limits fixed according to the amount of the credit.

In most cases, this type of credit is accompanied by a payment card. This is given to you with the credit, and must indicate on the back, in legible characters, the credit card..

A revolving credit may be offered by:

  • a bank
  • or a body specialized in consumer credit
  • or by a retail chain
  • or by a mail order.

Before proposing a revolving credit, the lending institution (bank, credit institution...) must inform you the terms of the loan and the extent of your commitments.

It must also verify your financial ability to repay the credit. To this end, he must give you a standardized pre-contract form which include the total cost of the loan, the amount of the monthly payments and the interest rate charged.

If the lender believes that you have the means to repay the loan and agrees to grant it to you, the lender must provide you with a copy of the written contract offer. You have 15 calendar days to answer.

Funds may be paid only 7 calendar days after acceptance of the offer.

Please note

if the amount of the credit exceeds €1,000, the lender must accompany his offer with a proposal to depreciable credit to compare the 2 offers.

To accept your lender's offer, you must provide your lender with a signed, dated copy of the contract. But this signature doesn't mean you're finally accepting the credit. After acceptance, you have a withdrawal period 14 calendar days during which you can reverse your decision. The procedure for renouncing the contract shall be indicated in the contract. A detachable withdrawal slip must be attached. On his back, you have to find the name and address of the lender to return him.

Once the withdrawal period has been exceeded, the contract is considered to have been definitively accepted.

The institution or organization that prefers may require you to loan insured..

He can offer you insurance, but he can't impose it on you. Indeed, you can choose freely the organization that will insure your loan..

Once the offer has been accepted, the lender must send you a monthly summary of your credit situation.

This document shall include the following information:

  • Statement Stop Date and Payment Date
  • Share of available capital
  • Amount of maturity, share of return of capital and share of interest
  • Period rate and overall effective rate
  • Amount of refunds already made
  • Total amount due
  • Estimated number of monthly payments due to achieve full refund

Contract Duration

The revolving credit agreement shall be concluded for one year.

The contract may be renewed annually. Before proposing to extend the contract, the lender must consult annually the file containing information on the typed payment incidents.

Every 3 years, he has to check if you are able to repay the loan.

Three months before the annual deadline, the lender must inform you of the terms of the contract extension and the procedures for the reimbursement of the sums remaining due.

When renewing the contract (with or without the use of a credit card), you can oppose the proposed changes up to 20 calendar days before their effective application. The refusal slip to be contained in the renewal information letter must be returned to the lender.

You will then have to repay the amount of the money reserve already used.

Credit repayment period

The law imposes maximum repayment terms that cannot be exceeded. They vary depending on the amount of the credit:

  • 36 months if the total amount of the credit is less than or equal to €3,000,
  • 60 months if the total amount of the credit exceeds €3,000..

If the credit agreement is accompanied by insurance, the payment of insurance contributions may not lead to the repayment periods being exceeded.

Possible changes

You can ask at any time:

  • reduction of your credit reserve,
  • suspension of your right to use it,
  • termination of your contract.

You are then required to repay, under the terms of the contract, the amount of the reserve used.

You can also request the conversion of your revolving credit into a conventional credit at the annual renewal of the contract.

The refund amount is then fixed and the end date is known.

If you do not use the credit reserve

If, for 1 year, the credit reserve and the means of payment associated with the credit have not been used, the revolving credit agreement shall be suspended: you cannot use the revolving credit.

The lender must ask you if you want to terminate the contract.

You should be sent a document that includes the following information:

If you return this document (signed and dated) by 20 calendar days before the contract deadline, the suspension is lifted and you can use the revolving credit.

If you do not return this document (signed and dated) within this time limit, the suspension is maintained.

If you do not reactivate the contract, it is automatically terminated 1 year after the suspension.

The lender may grant you a deferral if you experience temporary financial difficulties or if your repayment capacity deteriorates.

However, such extension may not be granted more than 2 times a year. During this period, your credit usage rights are suspended.

Please note

if you have taken out insurance for your credit, you must check whether the difficulties you encounter are covered by this contract.