Ready for projects, what do the numbers say?

With growth up to 2.7% in September 2021 in France, the figures for the euro area are also increasing by 1.5% at the start of 2022, after a 0.5% increase in the third quarter. Figures that underline the attractiveness of the French and Europeans for this type of financing. These loans, usually granted over a period of more than a month, facilitate access to certain consumer goods and/or provide cash. Even after putting more money aside during the health crisis, the French remain at the top of the European countries where project loans thrive. 51% of French households have already used consumer credit, compared to e.g. 46% of Germans.

Project loan, a loan that can finance all projects

One of the reasons why project loans are popular in France is that they allow individuals to finance almost any type of project. In fact, any adult can request this personal loan to have enough to finance their projects, to realize their wishes, such as:

• purchase of household appliances,
• carry out small decorative works,
• financing of development work,
• financing a holiday or family travel project,
• celebration of a marriage,
• purchase of a used motorcycle, car or other vehicle,
• financing of a family event, etc.

The amount borrowed by loan organizations that offer this financial product is generally between €500 and €75,000 (€200 is the minimum amount). If the maximum amount is reached, it must be repaid within a maximum period of 7 years. Unlike types of loans such as new car loans or mortgages, project loans do not require proof of expenditure, purchase, project or work. The borrower can use the borrowed money as he sees fit without being responsible to the bank or the lender.

In addition, there is no need for a personal contribution to have a project loan, as is the case with the mortgage loan, for example. Project loans can in most cases be adapted to the borrower’s projects and ability to repay.

Subscribe to a project loan: simplicity and speed online

Another key factor for the success of the project loan with French persons is the possibility to apply for this loan online. With some lending organizations, application fees are not even required for an application initiated online. This option makes it easier for future borrowers to get this loan, as they no longer have to go to the bank’s or lender’s premises.

From their computer or smartphone, the future borrower can carry out a loan simulation on the lender’s platform with a few clicks. He can thus know the conditions that must be met, the amount he can benefit from and the terms of the project loan. The actual application for this credit is just as easy after this step.

It is generally sufficient to fill out a form on the website or platform of the lending bank or lending organization. The documents photographed or scanned to be provided by the borrower include:

• a valid identity document,
• the copy of the last account statement where he had his residence,
• the last 3 payslips,
• the original of the last tax notice or tax warning,
• the employment contract (CDD or temporary),
• a rent receipt or electricity bill of less than 3 months,
• supporting documents regarding current consumer loans.

These documents to be provided vary depending on the profile of the borrower, the project(s) for which the project loan is requested and the lender.

After completing this step, the future borrower will, in principle, receive an immediate response from the bank or lender. It is then up to him to validate his request directly online. The cancellation period is generally 14 calendar days from the day of acceptance of the credit contract offer.

Deadline for making funds available for a project loan: approx. 8 days

The project loan is also appreciated by the French because it makes it possible to respond to emergency situations. After making the online request and accepting the loan offer, it is actually possible for the borrower to collect the requested amount from the 8th day after that date. This makes this financial product a loan whose time to get the desired amount is shorter. For loans such as mortgages, you must wait 15 days to 2 months before the funds are made available.

For project loans, the requested amount is paid by transfer to the borrower’s bank account. He can even choose between a single provision or a staggered provision.

In the first case, the borrowing bank or organization pays the project loan funds at once to the borrower’s deposit account. In the second case, the requested amount is paid in installments, usually over a period of no more than 6 months, to the applicant’s bank account. With each payment, the latter can receive an SMS alert informing him of the availability of funds in his account. For this type of service, you must of course have provided your mobile phone number.

Project loans, fixed-rate loans

Project loans are popular in France because their interest rate is generally fixed. Borrowers who know they can use this credit to finance all their projects are also assured of not being affected by market interest rate increases, as is the case with variable rate loans. The exchange rate is set when the loan offer is signed and remains unchanged throughout the term of the loan.

The rate for a project loan of €7,000 over 36 months is obviously not the same as for a project loan of €15,000 over 26 months. It varies depending on the characteristics of the desired project loan, such as the amount and the desired repayment period. The fact that it is fixed still allows the borrower to have constant monthly payments to better plan their finances after getting the loan.

Flexibility in repayment of project loans

The standard repayment period for project loans is linked to the amount borrowed. The rules stipulate that a project loan of a maximum amount of €3,000 must be repaid within 3 years; if the amount is greater than €3,000, repayment must be made within a maximum period of 5 years. One of the special characteristics of this financial product, one of the key factors for its success with the French, is the possibility that certain loan institutions allow for early repayment for free.

By taking out the loan, the individual is therefore certain that he can make an early repayment without paying compensation. He is also free to choose a partial prepayment or a full prepayment according to his financial capacity.

Sources:

• www.bfmtv.com/economie/consommation/le-credits-a-la-consommation-seduit-toujours-plus-les-francais_AV-202112070344.html
• www.banque-france.fr/statistiques/credit/credit/credits-la-consommation
• https://mabanque.bnpparibas/fr/borrow/loan-consumption/loan-projects
• https://www.cmb.fr/reseau-bancaire-cooperatif/web/prets-et-credits/credits-consommation/pret-projets#note_hc_48101
• https://www.capitaine-credit.com/actualite-credit/pret-projet/
• https://www.labanquepostale.fr/particulier/borrowing/financing-of-projects/pret-personnel-project.html
• https://www.younited-credit.com/projects/pret-personnel/demarches/pret-personnel-rapide
• https://www.franfinance.fr/solutions-credits/pret-travaux/que-financer/pret-personnel-ou-pret-travaux/
• https://www.capitaine-credit.com/actualite-credit/delay-pour-obtention-argent-credit/
• https://www.borrowing.com/finance/guide/deblocage-fonds.php#:~:text=Le%20d%C3%A9blocage%20des%20fonds%20intervene,courier%20recommand%C3%A9%20de%20La %20 Post.
• https://www.credixia.com/a-propos/frequent-questions/what-difference-between-fixed-rate-and-variable-rate