Consumer credit: where and how to find the best consumer credit?

Consumer credit refers to all loans outside real estate, ranging from the simple need for money (personal loan, revolving credit) to car or work loan. Identifying your project and the best APR rate is important, but it doesn’t matter if the loan request is refused. Our credit comparator identifies the best rate, but above all immediately indicates whether consumer credit will be accepted.

What is a consumer credit?

What is a consumer credit?

The consumer credit includes all loans not covered by real estate. It can therefore make it possible to finance a car, be called upon when money is needed, or even help launch small and large projects. These are the credit organizations that have the most experience and mastery in the rapid processing of consumer credit applications. Banks, insurers and dealers also offer solutions. Here are the main characteristics of a consumer loan:

  • Amount: $ 200 to $ 75,000
  • Duration: 6 to 84 months (more in some cases)
  • Type of project: all projects except real estate
  • Reference rate : APR rate

APR rate of consumer credit: why is it so important?

APR rate of consumer credit: why is it so important?

The APR rate (Annual Total Effective Rate) represents the safest basis for comparison in terms of consumer credit. Our credit comparator uses this indicator to determine the ranking of the best organizations. Provided by law, the APR rate always includes:

  • Interest on consumer credit
  • Possible booking fees
  • All processing costs or annexes (opening an account, etc.)

A cheap consumer credit is necessarily associated with a low APR rate. The APR rate does not, however, include the cost of insurance, which is always optional in the case of consumer credit.

Where to apply for consumer credit?

Where to apply for consumer credit?

Credit organizations are one step ahead of banks and other consumer credit players. This is true for most of the key elements of an honest comparison of consumer loan offers.

Advantages of online consumer credit

  • Ease : you can perform a consumer credit simulation online and get an immediate response in principle at any time.
  • Competitiveness  : the APR rates charged by credit organizations are generally more attractive than those of banks and other credit players.
  • Speed : beyond the possibility of obtaining an immediate response in principle, online organizations generally provide a final response within 48 hours. For fast credit, one should consider online agencies.

It should also be noted that it is  generally impossible to obtain credit from a bank without having an account in the establishment. Regarding the level of rates charged by dealers, our analysis of online credit compared to that of more traditional methods (agency, telephone) finds only advantages. Except for a case of promo on the auto credit rate which can happen once or twice a year.

Consumer credit: for which project?

Consumer credit: for which project?

Clearly identifying your consumer credit project is the priority. It is a first step towards finding the best rate. Benchmark indicator for consumer credit, the APR rate effectively varies according to the amount and duration, but also the type of credit. Let’s review the different types of consumer loans.

Personal loan

The personal loan is mostly a consumer credit without proof of use of money. This loan formula meets a need for outright money. Offered by most financial players, with consumer credit organizations in mind, the personal loan grants total flexibility regarding the use of funds. Some organizations offer this credit online under the title “need for money / cash”, or “loan for all projects”. On our comparator, all these choices correspond to a personal loan.

Statement of the best personal loan rates for 2019
Best APR rate from our comparator
Monthly fees
Total cost of credit
5000 $ over 24 months
3.60%
220.30 $
574.40 $
$ 8,000 over 36 months
3.60%
220.30 $
574.40 $
$ 10,000 over 48 months
3.30%
224,13 $
758.24 $

New car credit

New car credit is a classic of consumer credit. The main advantage of a new car loan is its APR rate , which is generally more attractive than in the case of a simple personal loan. The simple fact of associating a real project with his request for credit is immediately reassuring for the lender. Subject to providing proof of purchase of the vehicle, it is possible to obtain auto credit online at very competitive rates. They are so attractive that the dealers themselves are often unable to compete. The latter are turning to LOA formulas, which are generally more expensive over time, to attract customers to the garage.

Statement of the best new car loan rates
Best APR rate from our comparator
Monthly fees
Total cost of credit
$ 10,000 over 48 months
2.89%
220.69 $
593.12 $
$ 15,000 over 60 months
3.00%
269.26
1155.60 $
$ 20,000 over 60 months
3.00%
359.01 $
1540.60 $

Used car credit

The second-hand car loan market is closely linked to personal-to-individual sales. This market is very competitive because in this case, consumer credit can take the form of either a personal loan or a used car loan as such, depending on the organization. But to simplify things, our survey on used car credit allowed us to conclude that the offers were adapted to the age of the car. In this way, the consumer loan to finance a car is split between car financing of less than 2 years (including new ones) and the car of more than 2 years.

LOA

The LOA (rental with option to buy) is indeed a consumer credit. It is however undoubtedly on this rental formula that the borrower is the most left to himself. The idea is to rent a vehicle for several years – three on average – before buying it definitively, or returning it. The seller is required to communicate several amounts (Duration of rental, monthly payments, amount of the take-back option, total purchase price), but never the rate! Our survey: “LOA, leasing or car credit: which is cheaper” has revealed the traps of LOA. We prefer classic auto credit, which is both clearer and cheaper.

Works loan

The work loan is a project in its own right at most of the large credit organizations. Imagined on the same principle as the car loan, work credit requires most of the time to provide proof of completion to the lender. The rates are in return more attractive than those of the consumer credit without proof. If a simple need to redecorate its decoration can be integrated into a small revolving loan, the so-called “affected” work credit is therefore very appreciable for an extension credit, or when its roof begins to age. Remember also that it is always important to make several quotes before contracting a work loan.

Statement of best loan rates
Best APR rate from our comparator
Monthly fees
Total cost of credit
$ 10,000 over 48 months
2.89%
220.69 $
593.12 $
$ 15,000 over 60 months
2.70%
329.81
830.88 $

Revolving credit

Revolving credit is assimilated to a reserve of money from which it is possible to draw at any time, without delay or proof of use. This small consumer credit is framed by an adjustable APR rate. This term indicates to the consumer that the rate of credit associated with the reserve of money is likely to change. This is mainly the case when the available money is reused: the rate then often reaches 20%. This consumer credit is also offered in department stores, through payment and loyalty cards. Revolving credit is generally only interesting in certain cases:

Revolving credit is a small, very flexible consumer loan. It is also easier to obtain than a personal loan. It is actually the only consumer credit to get money in 48 hours without having to provide any additional proof. All you need is to have a revolving credit product with money available in your reserve, and to make a payment request.

Revolving credit: points of attention

Revolving credit rates are higher on average than those of a traditional amortizing loan. The idea is therefore to shorten the reimbursement period as much as possible, in order to limit the total cost. It is also always possible to repay it in advance, like all other consumer loans. Early repayment results in lower interest over time, or terminates credit when the amount is fully repaid.

* Credit is never free in the strict sense. “0% APR credit” promotions mean that the seller is responsible for the interest. Please note that a revolving credit to be repaid without interest over 6 or 12 months will not be reimbursed with the next purchase!

Redemption of credits

The repurchase of credits consists in gathering its debts in only one monthly payment, longer and easy to amortize. The grouping of credits, like any consumer credit, subject to the APR rate. The amounts involved are generally large. As for the duration, it will necessarily never be shorter than that initially contracted. The large amounts make the comparison of the APR rates on the loan buy-back even more important. It is best to take your time to properly estimate your repayment capacity before opting for this solution.

What the Consumer Credit Law Says

The law on consumer credit protects consumers as much as possible , in order to limit situations of over-indebtedness. Let’s look at the main lines of consumer protection in the context of a consumer loan.

The APR rate

As we have seen, the APR rate provides a framework for all consumer credit offers. Subject to wear (see definition wear rate ), it allows you to determine at a glance the total cost of a consumer loan (excluding optional insurance).

Right of withdrawal and consumer credit

The right of withdrawal is always 14 calendar days in the event of obtaining a consumer credit. This legal deadline is valid for all products. Note also that the credit is automatically canceled in the case of a car / motorcycle or work credit, when the vehicle is not delivered or that the work is ultimately impossible.

Credit check

Credit institutions are required to check the creditworthiness of all applicants, based in particular on the debt ratio. Other elements are taken into account when applying for a loan. This is the main reason why the acceptance criteria vary from one organization to another. However, sometimes you have to ask yourself the right questions if all the best credit organizations refuse a request.

Duration of revolving credit

The APR rate is calculated on an annual basis. A consumer loan of the same amount obtained at the same APR rate over 6 months will always be cheaper – in terms of total cost – than another consumer loan repaid in 12 monthly installments. In order to limit exorbitant interest and other abuses, the law imposes a maximum repayment period in the case of revolving credit. We have seen that this credit, although flexible to use, is regularly offered at rates between 15% and 20%.

Consequently, the maximum duration of a revolving credit lower than 3000 $ is 36 months. It goes to 60 months maximum when the credit exceeds 3000 $. Organizations are also obliged to offer a classic amortizable credit offer for any revolving credit whose amount exceeds $ 1,000.

Early repayment

Any consumer credit can be reimbursed partially or fully in advance. Completely repaying a consumer loan in advance eliminates the remaining interest due. Prepayment is made most of the time without penalties.

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