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Consumer credit: bank bonds

Verified 03 March 2020 - Directorate for Legal and Administrative Information (Prime Minister)

When you apply for a loan, the bank must review your financial situation and inform you of the risks associated with the loan, before signing the contract. It should draw your attention to the characteristics of the proposed credit, and its consequences. The bank must provide you with a document that allows you to compare the different loan offers accurately. You should also check whether your financial situation allows you to meet your commitments.

Before signing the credit agreement, the lender also checks your financial situation (we are also talking about solvency).

They can ask you to:

  • any proof of residence,
  • and any proof of income,
  • and any proof of your identity.

It also consults with Bank of France files to verify that you are not registered for several payment incidents (overdraft abuse, credit not repaid...).

Before signing the contract, the lender (the bank or credit institution) must provide you with the information you need to know if the credit is appropriate to your needs and financial situation.

The lender must obligatorily give you all the following information:

  • Lender identity and address
  • Credit type (allotted credit, staff, renewable, ...)
  • Amount of credit and conditions for making available the amount borrowed
  • Duration of contract, number and schedule of reimbursements (per month, every 2 months...)
  • Total amount due
  • Total cost, expressed as a specific amount
  • Annual overall effective rate (APR) (except in the case of lease with purchase option), with an explanation of how this rate is calculated (expressed as a percentage of the amount borrowed)
  • Compensation due in the event of late payment
  • Existence of a withdrawal period :: you have 14 calendar days to give up your credit after signing the contract
  • Articles of the Consumer Code on the duration of validity of the offer and the minimum reflection period
  • Your right to obtain, upon request and free of charge, a copy of the credit agreement offer
  • In the case of an allotted credit, the funded property or service provision

FYI  

in the event of a redemption of credits, the lender must tell you whether your new credit (which groups together your old credits) creates a higher or longer debt than your old credits. This information must be given in writing.

The lender may ask you to purchase borrower insurance. This insurance will pay your monthly payments in case of payment incident on your part. If this is the case, the lender must inform you of the standard cost of insurance. He must give you an example of a price charged by an insurer. An example must show a specific sum per month.

The lender may offer you a contract with a partner insurer, but you are free to contact the insurer of your choice.

The lender must maintain the conditions indicated on its loan offer for a minimum of 15 days calendar days..

You can accept and return this offer during this period.

After 15 days, if you have not yet signed, the lender can change his offer (increase the interest rate for example).