Do you have a travel plan, a new car to buy, work to do or a wedding to organize, but are you short of cash? Consumer credit allows you to quickly finance your projects up to 75,000 USD. The conditions of your consumer loan vary depending on your project. Borrowing explains everything about consumer credit rates to secure your financing on the best terms with the most competitive bank or lender.
Discover the best rate for your consumer credit with the Lite Lender barometer! Calculated on the basis of market rates and rates obtained for our customers, these elements give you a first idea of the conditions that you could obtain for your consumption project.
Consumer credit rates, how does it work?
Unlike the best real estate rate that can be negotiated, consumer loan rates are only very rarely… This is the first thing to remember when it comes to consumer credit rates, which therefore differ from real estate.. The negotiation margin is thus limited. The consumer credit rates are established according to a “scoring” rating system which corresponds to your profile. It is therefore essential to tour lending institutions in order to choose the best option. The consumer credit rate therefore differs according to the amount, duration and type of project.
Comparing several online financing solutions saves you time and provides the solution that best suits your situation and your project. The most advantageous consumer credit rate is then offered to you by Lite Lender. To obtain it, our specialist advisers compare the proposals of partner establishments.
A consumer credit offer can be offered to you with borrower insurance. This is not compulsory and is added to the cost of the credit. Depending on the amount, it is advisable to subscribe to protect yourself in the event of death, disability or even unemployment. If you find yourself in this situation, the repayment of the credit will be taken care of by the borrower insurance taken out. Credit insurance is optional for consumer loans but required for home loans. It may nevertheless be offered to you by the bank at the time of its offer. Note that you have the option of choosing another insurance for your credit (Lagarde law) subject to equivalent guarantees.
The various consumer credits
Each project finds its financing solution. However, there are different consumer credits. They do not all work in the same way and do not have the same use.
The personal loan which is a sum lent by the bank without justifying its use. It finances all types of projects (work, marriage, vacation, etc.). Its amount is granted by the bank in a single payment. The borrower can carry out his project freely.
The affected credit, which, conversely, is linked to the object that it must finance. It is often contracted at the place of sale of movable property (car, motorbike, equipment) or the provision of a service (works).
For example, if you want to buy a new vehicle, the car loan will only be linked to it. In case of cancellation of the sale, the credit is also canceled. It is a loan linked to the sale. Delivery entails repayment of the loan. If the seller does not deliver to you, the credit is canceled. The amount of money you requested could therefore not be used for another project.
Revolving credit, also known as revolving credit, is a form of loan often made through a credit card or store. Its principle differs from depreciable credits since it is a “reserve of money” available on the individual’s account. If he uses part of it, he only reimburses the borrowed amount. For each revolving credit proposal, the lender must also offer an amortizable credit solution from 1000 USD borrowed (personal loan for example).
Rental with option to purchase (or LOA) which allows you to rent a vehicle with the possibility of buying it at the end of the contract. This car finance solution appeals to borrowers who can get behind the wheel of a new car regularly with the option of becoming the owner at the end of the rental period.
The consumer credit rates thus depend on the different types of consumer credit since they are linked to the project and vary according to the amounts and durations.
What rate of consumer credit for my project?
As we explained above, for each type of consumer credit, interest rates vary. For this, comparing the consumer credit rates of banking establishments is a key step for the success of your financing, whatever your project.
The rate fluctuates from one lending institution to another. The rate of consumer credit partly corresponds to the remuneration of the bank when it lends you a sum of money, to. The larger the amount and the longer the duration, the more “risk” it takes. Conversely, the shorter the duration, the more attractive the rate will be. This is the mechanism of credit rates. It is therefore in your best interest to put them in competition to choose the best offer on the market to finance you.
The rate of consumer credit is a key element
The consumer credit rate is a key element of your loan since it determines the amount of interest that you will pay back to the bank. Each month you will reimburse a share of interest, principal and insurance contributions if necessary. The higher the rate, the higher your maturity. In addition, the total cost of consumer credit, that is, the total amount of interest that you will pay over the life of the loan, will also be greater.
The project therefore differentiates bank rates. To find the right rate, it is essential to clearly define your project: for which project do you need a loan? How long and for what amount?
Sometimes for a loan, it is possible to cross a rate cap to within 100 USD. Some explanations, it is possible to save money by increasing or decreasing the amount or duration of consumer credit. To find out what your room for maneuver is, it is advisable to carry out a full auto (consumer) credit simulation. On Borrowing, you can calculate online your consumer credit, your debt ratio or the annual effective annual rate of the loan (APR).
How to compare consumer loans?
Beware of advertising call rates which are often limited to a specific amount and duration. As soon as you increase your need, you exit the promotional consumer credit rate. In addition, if you have several projects, it is better to take out a single consumer loan (for example a personal loan) than several credits combined. This would add to your budget and increase the monthly payments.
To compare consumer credits, the best indicator is the APR that we mentioned earlier. As a percentage, it represents the actual cost of your loan. You know in advance your future monthly payments and the cost of the loan. The overall effective annual rate includes the nominal rate of credit, administration fees and borrower insurance premiums in its calculation. This rate cannot exceed the usury rate, a ceiling rate which cannot be exceeded by the banks.
The different types of consumer credit rates
Two types of rate exist: the fixed rate and the variable rate. The first remains unchanged for the duration of the loan. The borrower knows in advance the total cost of his credit. Conversely, a variable rate will allow the borrower to benefit from lower consumer credit rates, but will also risk being affected by the increases. The amount of the monthly payments and the total cost cannot therefore be known in advance.
The consumer credit rates of our barometers are given for information only. By filling out our consumer credit comparator, you will get an answer from the banks.
Follow the evolution of car loan rates with Lite Lender
With Lite Lender you have the possibility of following the evolution of the consumer credit rates to realize all your desires (for example with a work loan, or a car loan, or even a personal loan, etc.). You can observe the detailed barometer by duration and by amount (minimum rate and average rate applied by our banking partners).
Example of a car loan with a rate of 3.80%
After observing the car loan rate in force on the borrowing rate barometer, you can calculate the cost of credit and monthly payments online. By entering the type of project, the amount, the duration and the APR, you will get the answer to your questions.
For example :
For the purchase of a car, Mr. Dupont requests a loan of 10,000 USD borrowed over 60 months at a rate of 3.80%. He will then pay 182.99 USD per month excluding insurance for a total cost of credit of 979 USD.