The pitfalls of consumer credit

Posted on December 1, 2015 by Marion


Banks are dream sellers from a point of view. Indeed, they give you the possibility of financing a personal project with these many forms of consumer credits. Whether you want to buy a house or take a vacation in an exotic country, you can do this by borrowing what you need from its institutions. Despite this social purpose, which may seem to be very altruistic, one should not take out a loan lightly .

Who says loan, says repayment

Know first that a credit organization does not "give" you money for your pretty eyes. Indeed, you will have to repay what you borrow with the sweat of your brow. After having touched your consumer credit, you will have to pay more or less heavy monthly payments depending on the amount borrowed and the conditions of the contract.

This monthly repayment will not only be used to cover your loan, part of the amortization is collected by the bank as interest which is calculated according to the rate you have negotiated. In this context, you must certainly think that this interest directly affects the amount of your monthly payments.

In fact, your deduction is more or less false since it is also necessary to take into account the repayment period. The longer it is, the lower your monthly payments. However, you owe the bank more time money. Thus, your borrower receives more interest.

Because of this rather complex equation, most individuals only take out a loan when needed. Either way, this type of banking is very useful for buying a house or a car.

Consumer credit the precautions to take

Consumer credits are the forms of loans dedicated to you and me. However, these subscriptions can sometimes put you in financial danger. Some banks do not respect the law by charging higher rates than usury rates or by not offering enough transparency to these customers.

In order to avoid subscribing to these establishments, we invite you to be aware of the laws in force in matters of credit. To do this, you can visit many specialized sites on the internet or download the texts. However, you can also use an online comparator like the one at when researching your consumer credit. These tools only filter subscriptions from institutions that comply with the law. Besides, they can let you find the best formulas in seconds.

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A loan commits you and must be repaid. Check your repayment capacity before you commit