A car loan commits you and must be repaid ”: this mention generally bars car loan offers. Repaying consumer credit is the principle of monthly payments. However, you may have to repay your loan early. This early repayment can be partial or total, in order to reduce the total cost of the consumer loan.
Conversely, you may experience some difficulties in paying your monthly payments.
In any event, the lender is subject to an information obligation during the repayment period. He must tell you at least once a year how much is owed.
For a revolving credit, the information must be monthly and more detailed. The summary document must in particular specify the share of available capital, the amount of monthly payments already paid, the current interest rate, the date of the statement, the Good lender (overall effective rate, this is the indicator that measures the real cost of a consumer loan) and the number of monthly payments.
Follow the monthly payment schedule for consumer credit
By default, the repayment of the consumer loan is made via the monthly payments over the duration of the loan indicated in the schedule on the contract. They can be spread over a period of 12 to 84 months.
The first monthly payment comes after receipt of the car. It is generally possible to choose and adjust the day on which the monthly payments are made (the 10, 20 or 30 of the month) while the loan is being repaid.
Can I repay my loan early
It is possible to take advantage of an inflow of money to repay your consumer credit in advance : this provision is provided for by article L. 311-29 of the Consumer Code. This early repayment can be total or partial. For example, in the case of a car loan:
- In particular, a full refund can be presented when the vehicle is resold ;
- the interest in the second case is to reduce the duration and therefore the total cost of the car loan.
Beware, however, of the early repayment indemnities that you may have to pay.
Since the Lagarde law (2010), the lending institution is entitled to ask you for IRAs (early repayment indemnities) if you repay an affected credit or a personal loan and if the amount of the early repayment is greater than $ 10,000.
The amount of fees is capped at:
- 0.50% of the amount of the credit , if the remaining term of the loan is less than 1 year;
- 1% for periods of one year or more.
In addition, the costs must not exceed the amount of interest still to be paid.
It is advisable to send your request for early repayment by registered letter with acknowledgment of receipt , at least one month before the desired payment date, which must correspond to the usual date of monthly payment.
The prepayment of a revolving credit is free , you will have no fees to pay. A clarification concerning revolving credit: its repayment does not close the loan contract. You can reuse revolving credit.
What if I have repayment difficulties?
In the event of payment difficulties, your advisor must inform you of the financial consequences of defaulting on your loan.
In response, measures can be applied:
- An extension of deadline. However, this solution remains limited to twice a year. It is possible to suspend the credit for one or more months. In return, the duration of repayment of the consumer loan becomes longer , while the amount of deferred interest can be increased. In other words, the cost of your consumer credit increases.
- If no amicable solution is found, article L 311-30 of the Consumer Code authorizes the lending organization to demand the reimbursement of the capital remaining due, as well as unpaid interest. Compensation may also be requested.
Why ask for an extension of deadlines?
Despite all the precautions, some unforeseen “hard knocks” can affect the budget of a household or the reimbursement of your monthly payments. These “accidents” can for example be the loss of a job, a divorce or the death of a spouse.