Do you want to buy a house or a car and pay in installments? Personal credit could be the solution to your problems. It is a type of personal loan intended for the acquisition of a good or a service. The borrower can contract such a loan by contacting a banking establishment. However, a question remains: how does the particular credit work? Read the rest of this article to learn more.
The private loan is the granting of a loan to a private person who wants to buy a consumer good or service. The person requesting the loan repays it to the financial institution which grants it according to the terms and time limits set by the contract signed by the two parties.
In general, this type of consumer credit is used for the purchase of goods such as furniture, cars and household appliances. For example, the reimbursement of the purchase of a car can be made in 24 monthly installments, on a monthly basis, for an amount of 200,000 FCFA. You can simulate your personal credit at any time on https://www.locafrique-sf.com/particulier/.
Interest rates are generally low, in order to facilitate the consumer’s decision-making process leading to the purchase. The product itself acts as a guarantee in the event of default by the consumer, or in the event that the consumer does not pay the installments.
The particular credit is a variant of the classic personal loan that works in a particular way. It can only be demanded of you in certain circumstances. Here’s what you need to know about this particular type of loan.
Consumer credit is a loan that will be granted to you by banks or financial institutions. It will be disbursed solely and exclusively to meet strictly personal expenses.
For example, you can apply for this loan to buy furniture or to finance other expenses that only concern the personal sphere. If you are an entrepreneur, you will not be able to take advantage of consumer credit to make purchases for your business.
You can use it for:
In simple terms, the particular loan is a financing which is addressed to all the consumers; That is, anyone who wants to make purchases of products, services or durable goods in installments.
Consumer credit can be offered by banks and credit institutions, or even by stores that allow purchases in installments. Yes, the famous installment plan that is widely used by Senegalese, mainly in large stores, is a variant of the private loan.
Basically, the particular credit is a loan whose objective is to allow the consumer to make his purchases, even if he is not able to pay in cash at the time of purchase. Most banks also offer another option for account holders with a good relationship with the institution. In this case, the credit works like a pre-approved personal loan, which can be used for any purpose and not just in predetermined purchases.
Like any type of credit, the personal loan has fees charged by banks, stores and finance companies on the value of the purchase or loan.
When a purchase is made in several installments, that is to say using a consumer credit, the installments are subject to an increase in interest. A practical example can be seen when buying a mobile phone, which in cash would cost 100,000 FCFA and in installments 110,000 FCFA. That is, whoever chooses to buy the same device by paying in installments will pay more.
This difference between the cash value and the installment (also called the term) is the consumer credit interest rate.
The amount of these fees may vary depending on the store or financial institution offering the particular loan, but they are all specified on the Central Bank’s website and can be viewed by anyone. It should be noted that the interest rates of the particular loan are lower than those of other types of credit, such as overdrafts for example.
The loan is granted by financial institutions, banks or department stores. To contract, the customer undergoes a credit analysis that varies according to the policies of each institution. In addition, the number of installments and interest may also vary depending on the amount requested.
In banks, consumer credit is offered as a pre-approved loan option for account holders with stable incomes. The credit is released immediately and without bureaucracy. Payment can be made within 60 months and installments are automatically debited from the current account.
The biggest advantage of consumer credit is the financial flexibility it allows. Before widespread access to credit cards and other consumer loan options, people often had to save for years to make major purchases.
If your car broke down or you needed a new fridge, it could hurt your ability to make ends meet. The particular credit allows consumers to spread large costs over months or years so they don’t have to choose between buying a new refrigerator and putting food on the table.
The flexibility offered by credit also allows consumers to make more timely investments. If your home needs a few roof repairs, for example, access to credit allows you to pay for them immediately. Without credit, you may have to set aside money for months to complete repairs. In the meantime, leaks could cause even more damage to your home.
However, remember that a loan commits you. If you take out a particular loan, know that you are legally obliged to repay it. If you do not repay the loan you have taken out, you could put your name on the banks’ blacklist and face rather unfortunate consequences. You must also make sure that you really need this loan.