You are an individual or a professional with an urgent need of cash for a reasonable duration, the credit is a possible solution.
Depending on your status, this cash credit will allow you to have cash required for the proper functioning of your business for professionals, or to deal with an unforeseen expense for individuals.
Cash credit for individuals:
For individuals, the cash credit is primarily a personal loan as are also the work loan or the car loan.
Cash credit: a personal loan without proof
A personal loan is a type of consumer loan that will finance a project without tapping into your savings. It is a credit agreement that provides a certain amount of money over a period of time. The monthly payments paid by the borrower will allow the repayment of this credit during this period.
Justifying the project is not a necessary condition for granting it. It can be an unforeseen expense, the financing of a project like a wedding, a need for cash to cope with a complicated end of the month.
A cash credit does not need to be justified by a specific expense. Indeed, the amount allocated to this credit is not allocated to a product or a service.
It is this freedom as to the use of this loaned sum which makes it its major asset for individuals.
The terms of the cash credit
As the cash loan is primarily a personal loan, the same terms are therefore applicable in terms of amount, duration or in terms of rates.
The amount of the cash credit is between € 200 and € 75,000. It is the Lagarde law dating from 2010 that set the maximum ceiling of € 75,000. Prior to this law, the ceiling for this type of credit was € 21,500. This maximum amount is intended to protect the borrower because below and beyond this amount the borrower no longer benefits from the protection of the Consumer Code.
Regarding the repayment term of the cash credit, this can last between 4 and 84 months, with rare exceptions. The duration is adjusted according to the overall amount of the project for which this cash requirement is expected.
The rate assigned to a cash loan is called the APR (annual percentage rate of charge). It includes the basic interest rate, fees, commissions, miscellaneous remuneration and possibly insurance premiums. This rate is fixed and can not vary during the term of the loan. It is generally between 2.5% and 7.7%. On the other hand, it can not exceed the usury rate, ie the legal maximum rate set by the Banque de France. This is a significant point of vigilance for individuals because the rate for a cash loan varies significantly depending on the lending institution.
Generally, relatively low processing fees will be included in the overall cost of the cash loan for the borrower. Indeed, at most, they will not exceed 1% of the total credit, or 75 euros at most.
The cash credit is subject to a withdrawal period protecting the borrower. This period is 14 calendar days from the signing of the cash loan agreement. This gives the borrower time to reverse his commitment and he does not need to justify himself if he retracts. This delay conditions, consequently, the release of the sums. Only after these 14 days, the funds will be available on the borrower’s account.
Cash credit subscription
You can contact various specialists to obtain cash credit such as a bank, a personal loan broker or other personal loan organizations (insurance, supermarkets, online financial organizations, etc.).
It is these financial organizations that will analyze with you the loan best suited to your needs, taking into account your financial situation.
The offers against cash credit are many and different depending on the organization, so it is advisable to use the online comparators to simulate this loan and know the best rates offered.
The borrower will see his loan accepted according to his profile. Indeed, there are conditions of acceptance as a stable job, correct and regular income, a favorable repayment capacity. This debt should not exceed 33% of the borrower’s income. Indeed, as specified in the Lagarde Act of 2010, a loan commits you and must be repaid. So you have to check your repayment capabilities before you commit.
The lender has obligations to the borrower
These obligations must appear in the loan agreement namely: its identity, the amount of the cash credit, the monthly payments, the duration, the APR, the handling fees, the total cost of the amount, the withdrawal period, the possible compensation in case of late payment.
The advantage of the cash loan is therefore important for individuals because they have no need to justify what is the purpose of this loan. This advantage can also become its main disadvantage because if the project for which this loan is taken out can not be realized for such or such reason, the monthly payments will continue to run for the borrower.
Individuals are not the only beneficiaries of the cash credit, it is also intended for professionals.
Cash credit for professionals:
For companies, the cash credit makes it possible temporarily to have cash required for their operation, and for a fixed term.
Above all, it is important to know that the cash of a company represents all the cash available in cash or bank.
There are three categories of cash loans for companies: the cash facility, bank overdraft and campaign credit.
The cash facility
The cash facility is a fairly widespread and flexible cash credit granted to professionals. Its purpose is to deal with cash offsets especially during certain periods of the year. It is mostly a one-off tolerance. It is a tacit or verbal acceptance that the bank will give to its client company.
In practice, this tolerance allows the recipient company of this type of cash loan to make its debit account and this for a short time. It is a unilateral measure granted for a few days at the most, by the banking establishment. The latter sets the amount and a custom interest rate often high. The bank may change the terms of this cash facility, is under no circumstances obliged to renew this loan, and may at any time remove it.
This type of cash credit for businesses is close to the cash facility in practice, but it is especially its duration that will differentiate them. We are talking here about a period valid for a few weeks or a few months. The overdraft is also differentiated by the fact that it concretizes itself materially by a convention.
The overdraft authorization may be contained in either the original agreement of the account or be the subject of a separate agreement. As this loan is an agreement, the bank will have to respect the terms and can not suspend the effects without respecting a deadline of rupture legally fixed at 60 days.
Banking institutions are asking for more guarantees to grant this type of cash credit, for example, for small businesses, a guarantor’s guarantee.
This form of cash credit for professionals is aimed at companies that are subject to a seasonal activity. For example, a manufacturer of Christmas decorations must finance fixed charges such as salaries, rents and supplier invoices throughout the year. But it is only at the end of the year that its sales are made.
This loan makes it possible to make up for cash needs over several months, the repayment will be made as and when sales are made during the peak of activity of the company.
The campaign credit is riskier for the banks being tied to the sales forecast. In this sense, a thorough study of the financial situation will be carried out even before the granting of such a credit and the guarantees will be more numerous and specific.
Concretely, it can take three forms: the credit per box, the credit per ticket or the advance on goods. The credit per fund allows a company to be debtor for the duration of the campaign. Credit per note, on the other hand, allows the company that subscribes to it to issue a negotiable debt instrument. Finally, the advance on goods will allow the financing of stock.