7 tips to get a cheap conso credit
The consumer loan is a flexible and effective lever to finance its projects (purchase a new car, work in its interior) or deal with an unexpected (large invoice, cash flow problem). The interests scare you? We guide you to help you get cheap conso.
1 – Choosing the right type of consumer loan
To reduce the cost of borrowing, a fixed-rate, fixed-repayment, fixed-repayment credit should be favored over a floating-rate revolving consumer loan with adjustable maturities. This is the condition sine qua non to get a cheap credit. Only a fixed rate credit agreement will allow you to calmly reimburse your new car, your new property or the work involved in your second home.
Certainly, the revolving credit is often accompanied by a promotional offer with a tempting rate … at the beginning. But once the promotional period has passed, the interest rate rises quickly and nears the rate of wear! When looking at the overall cost of credit, the fixed rate is always less expensive.
Good to know: what is the wear rate?
The rate (or threshold) of wear corresponds to the maximum legal APR that credit institutions can practice when granting a loan. Objective: protect borrowers from potential abusive rates. The attrition rate is recalculated each quarter by the Francia Bank and published in the Official Journal.
2 – Cheap credit: trust the APR
Second parameter to consider to get a cheap credit and objectify your project in the best conditions: the APR (annual percentage rate). This is a very good indicator for the borrower since it responds to the same calculation formula, which one is the bank or the credit institution solicited. Thanks to this rate, it is possible to effectively compare an offer of credit with one (or more) other (s).
The APRC concerns both consumer and real estate loans. It includes all the expenses that the borrower will have to pay in the repayment of his loan, namely:
- The base rate (or nominative rate), which is in fact only a constituent element of the APR;
- Application fee ;
- Any costs that may be due to intermediaries involved in granting the credit;
- Warranty fees;
- Opening and account maintenance fees;
- The cost of using a payment method and other charges related to payment transactions;
- The insurance premium, if it is subscribed simultaneously with the lender;
- The cost of the valuation of the property (excluding registration fees relating to the transfer of ownership).
The annual percentage rate thus allows to have an idea of the amount of its future monthly payments, but also and especially of the total amount of credit. Note that if the borrower takes out an insurance policy in a third-party institution, the insurance premium will be subject to a separate deduction. Nevertheless, it must be accounted for.
3 – Prefer the loan assigned to the personal loan
As a reminder, revolving credit is an expensive and risky formula. In addition to the latter, two other forms of consumer credit exist: the loan and the loan.
As the name implies, the loan is a credit for a specific purchase (car, two-wheeled vehicle, travel, work, movables …), unlike the personal loan that requires no proof of use. The assigned loan is the cheap loan par excellence, because the bank or the credit institution knows what it (he) finances. Since the risk is lower, the organization in question will be better prepared to revise the interest rate downwards.
4 – Use the competition for a cheap conso loan
Who says cheap credit also says market research. To give life to his project, the borrower must not hesitate to compete between different institutions or credit platforms online, to obtain the best possible formula:
- The applicant can perform the comparison of the loan offers itself or entrust this task to a consumer credit broker;
- It can also use simulation tools to obtain a better rate by modulating the amount borrowed or the duration of the credit.
5 – Make a redemption of credits
Do you have one or more credits in progress (auto credit, marriage credit, mortgage loan, for example)? It should be noted that consumer credit can be repurchased. This is the best solution to avoid jeopardizing your budget and avoid any late penalties, which would result in increased interest. Again, the best solution for finding cheap credit is to use online simulation. The redemption simulation works on the same principle as the loan simulation.
6 – Opt for a small short-term consumer loan
The lower the amount borrowed, the shorter the credit period, and the lower the cost of the consumer loan. The institution considers that the risk of default is low or even zero. Therefore, choosing a refundable mini-credit quickly allows you to benefit from much more favorable conditions. But that supposes to finance the rest of his purchase with a personal contribution … But to obtain a cheap credit by this means is not within the reach of all.
7 – Bypass prepayment penalties
In case of sudden cash inflow, the borrower is tempted to make a partial or full refund of his credit in advance to avoid the payment of interest. It should be noted, however, that most credit institutions apply penalties for early repayment if the amount reimbursed exceeds € 10,000 over 12 months. A disadvantage that you will not meet at Younited Credit, whatever the amount!
To find a cheap credit offer, which is adapted to your project and the amount of monthly payments fits your budget, do not wait: make a simulation online via the platform Younited Credit!
Cheap credit: the three key points to remember
- Prefer a consumer credit to the fixed APR (assigned loan – for example, auto loan – or personal loan), and use it to compare offers.
- Whenever possible, opt for a short-term loan.
- Redeem credits to avoid late penalties and pay attention to prepayment penalties.
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