Anyone subscribing to a consumer credit enjoys rights to better balance the power between professionals and consumers. Several laws go in this direction by defining each of the rights of the borrower: right to information, right of withdrawal, right to early repayment, right to suspend repayments, etc.
Consumer Protection Laws
Several laws protect consumers when they subscribe to and implement a consumer credit. This is particularly the case with the Lagarde law, which, in addition to strengthening the accountability and protection of borrowers, makes every effort to make communication more precise and clear on the proposed credits. The Lagarde law consists of several measures:
- the borrower can choose his own borrower insurance;
- the over-indebtedness procedures are accelerated;
- the rates of wear are defined taking into account not the nature of the credit, but its amount;
- for a loan of more than € 1,000, the consumer automatically has the choice between a depreciable credit and a revolving credit
The Right to Consumer Credit Consumer Information
In order to protect consumer consumer credit, the right to information is one of the essential rights when subscribing to a personal loan. Before making an offer, the lender must provide the borrower with a form to complete in order to judge his borrowing capacity. Several proofs must therefore be provided when the amount of the credit exceeds € 3,000. The lender must provide the borrower with personalized explanations of consumer credit, presenting a clear and legible offer. In the absence of such information, the lender may be deprived of interest.
The right of Withdrawal: Pillar of Consumer Protection
Possibility for the borrower to reconsider its decision, the right of withdrawal applies in all cases of consumer credit. It is considered that the contract is valid only after the withdrawal period has passed. The withdrawal period corresponds to a period of 14 clear days from the signature of the contract. During this period, the borrower can use the form attached to the contract by completing it, by signing it and sending it by registered mail with acknowledgment of receipt to the lender. He has no need to justify his decision, whether his borrowing capacity allows him or her to complete the contract.
The Right of Reimbursement Anticipated to Reduce Interest
Anyone subscribing to a consumer credit has the right to request partial or full prepayment before the end of the contract. If the lender does not have the right to claim prepayment penalties, it may apply penalties under certain conditions. If the amount reimbursed in advance is more than € 10,000 over a period of one year, compensation may be requested by the lender. There are however exceptions:
- if the personal loan is a revolving loan;
- repayment is made while the rate is variable;
- if the reimbursement results from an insurance contract taken out to ensure repayment of the consumer credit;
- if the consumer has a credit limit.
The Right to Suspend the Reimbursement of a Consumption Loan
A consumer credit is contracted for several years, during which the borrower’s financial situation may change either favorably (in the majority of cases) or unfavorably. In the case of a job loss, a sickness, a case of over-indebtedness or an accident at work, it may happen that a borrower is no longer able to pay the monthly installments of his personal loan. Article 313-12 of the Consumer Code fortunately allows him to enjoy a right to suspend repayments of a consumer credit. To enjoy it, he will have to send a letter explaining his situation to the lender who will take care of reorganizing the repayment of the credit. With all these rights, make a simulation of consumer credit more serenely and with full knowledge of the facts!