A consumer credit application breaks down into several stages. The first is to identify where to file an application to receive a favorable opinion, while ensuring the best APR rate. We will see that the use of a credit comparator greatly facilitates the process. This article does not deal with the question of applying for a mortgage, which is much more tedious
The stages of a consumer credit application
Consumer credit refers to any non-real estate loan for an amount greater than 200 USD and / or reimbursed in more than 90 days. All projects are affected, from personal loans without supporting documents to car loans, not forgetting work loan solutions or small loans.
Here is how a classic credit application takes place:
- Search for the best APR rate with an online credit comparison tool
- Obtaining a first pre-acceptance notice from a credit institution, its bank, a concessionaire or any other lending institution
- Verification of the credit contract and supporting documents to be provided
- Choice of whether or not to subscribe to optional insurance
- Composition of the file, signature of the contract and sending by post or online
- The organization provides a final response within 2 to 8 days depending on the establishment
The trend is towards comparison, including in the credit sector. Not all offers are attractive. The rates vary widely from one lending institution to another, sometimes involving two to three more interest to pay. We can see this further through a comparison.
Our comparator allows you to apply for a credit online regardless of the project: car, work, small credit or personal loan. The amounts range from credit $ 500 to $ 70,000.
Carrying out a first online credit simulation is important for determining the level of the market. Without commitment, this first step does not prevent you from contacting your bank or going to a car dealership to assess and compare the different solutions offered.
Note: no need to start an online form when you are registered on the FICP, national file of credit repayment incidents. All establishments check the FICP file before making their decision.
Credit request: why use our comparator?
Making a loan request online through our comparator saves time, but above all, you get an immediate response in principle. Here is what our comparator allows:
- Compare the best APR rates actually offered by the largest credit organizations
- Get a first answer in principle for your file from each of the three best organizations
- Receive a final contract proposal by email
Our system is directly connected to the biggest specialists in consumer credit, facilitating a fast request for credit. Unlike certain fields in which several criteria can change the result of a simulation, our rankings are only determined on the basis of the APR rate.
The overall effective annual rate represents the real cost of a loan, including both interest and additional costs if they exist (administration fees).
Note: only requests for $ 4,000 or less favor, in addition to the rate, the specialists who most often accept applications.
Credit accepted or refused, how do you know?
The stage of the simulation passed, we get a gross ranking of the best rates of the day. Our system then immediately queries the organization ranked first. Here’s how to read his answer:
- File in depth study: the organization does not guarantee an accepted credit but returns by email with a proposal
- Acceptability greater than 50% (80% in our example): the credit is pre-accepted
- Acceptability less than 5%: credit refused
In this example of the results of a simulation of a 10,000 USD personal loan over 48 months, Bankate was not able to immediately accept the loan under the conditions indicated.
We therefore clicked on “online request without obligation” in order to obtain the immediate response from Sofinco, at the same rate. Good news, the credit is accepted this time. Useless therefore in this case to question the third organization, especially since the rate is much less interesting. The two organizations questioned will come back by email very quickly with a concrete proposal corresponding to the request.
Tips for getting the best rate
The first step in applying for a loan is to clearly define your loan type and need for money. It is possible to allow yourself some leeway, but this should not be excessive. For example, when applying for a works credit, it is a good idea to provide yourself with at least 1,000 to 2,000 USD in margin in the event of the unexpected.
Once the amount is well defined, it is important to properly estimate the repayment duration. Generally, the lowest rates are for the shortest durations. They are also more often associated with so-called “justified” loans, such as car loans and work loans. An auto loan request requires for example to provide the lender with an order form, in the same way as a work loan request accompanied by an estimate.
However, a shorter repayment period implies higher monthly payments. However, one should not exceed an excessive debt threshold. The main risk is to be exposed to a credit refused by all the organizations. The debt ratio commonly used by credit organizations is between 30% and 40%.
Understand the importance of the APR rate
Our ranking is based on the APR, the overall effective annual rate. This is not the case with all credit comparators, far from it. However, this is the only reliable and legal criterion on which a credit comparison can differentiate a cheap credit from another to be avoided.
This rate, defined by consumer credit law and managed by the Credither, must also be indicated in all credit advertising. The rate is also subject to usury, which is the maximum rate authorized by law. The wear rate is updated each quarter by the Credither. All lending institutions legally operating on the market must comply with it.
The importance of comparing rates
Nothing like a credit simulation to illustrate the importance of comparing APR rates. Here we have opted for a comparison of a car loan of 15,000 USD over 60 months.
|Auto loan $ 15,000 over 60 months||Fixed APR rate||Monthly fees||Total cost of credit|
|Cheapest credit||2.80%||267.96 $||1077.60 $|
|Most expensive credit||5.77%||287.37 $||2242.20 $|
The most expensive credit from our comparator (ranked 5th) means paying twice as much interest as the cheapest.
This difference of 1164.60 USD between the cheapest and the most expensive online credit is not an isolated example. All comparisons show significant differences in rates depending on the type of project, duration and amount. That including between the very best organizations, at least the most famous on the market.
Credit application: how long to receive the money?
Firstly, it is not possible to obtain the money before the eighth day when applying for a new consumer credit. This minimum reflection period is indeed imposed on organizations. It runs from the date of signature of the contract by the applicant.
Our experience allows us to say that it takes an average of 12 to 15 days from the day of the request before receiving the funds. Here’s how a quick loan application breaks down:
- Online credit application and agreement in principle: 5 minutes
- Receipt of the contract proposal: 2 days
- Sending the signed contract by post or online: 1 day
- Final response from the organization: 8 days on average
- Sending funds and receiving on his account: 2 days
In the best of cases, namely by opting for a 100% online credit organization (electronic signature and quick response), the money will arrive in 10 days. However, the deadline is never more than 15 days by completing all the steps diligently.
Good to know: the borrower has 14 days to withdraw from the date of acceptance of the credit. A withdrawal slip allows you to cancel the procedure, without reason or penalty. In the absence of a slip, an explicit letter prevails.
List of supporting documents
Preparing the supporting documents necessary to obtain a loan saves time in the process. There is nothing more frustrating than completing a credit application before seeing a list of supporting documents that you do not necessarily have. Here are the main supporting documents requested by the organizations for information:
- Valid ID
- Proof of recent residence
- Last imposition opinion
- Last account statement (sometimes)
Only certain credits obtained in large brands – often with the loyalty and credit card – make it possible to escape this list of supporting documents. The simple presentation of his bank card is generally enough to obtain credit up to 1000 USD. Finally, note that the tax notice is not claimed for a request for revolving credit. The revolving credit offers correspond to an amount below 4,000 USD on our comparator.