Sun. Apr 21st, 2024
personal loan

The personal loan, or installment loan, is a loan in which the desired amount is paid in one go, to allow you to finance a purchase or a major project. You then repay it monthly to the lender. The amount of the monthly repayment, also called monthly payment, includes a portion of interest (the annual effective annual rate), that is to say the cost of money.

 The personal loan is a consumer credit, which means that it is concluded for the purpose of acquiring goods or services with a limited lifespan. However, the notion of “limited life” should not be taken too literally, because it is not uncommon for a personal loan to be used to buy a car or finance work. processing, for example. The personal loan has this characteristic that its amount is generally spent directly and at once. You know how much you need, how much you will have to repay each month and in how many monthly installments.

But that’s not all. The interest rate, in the case of the installment loan, is fixed, whereas it is variable in that of the line of credit – in other words, it can fluctuate throughout the duration of the loan. The early repayment of the installment loan can sometimes be accompanied by a penalty, which is never the case for the repayment of the credit line. In the case of the personal loan, you know exactly how much the monthly payments will be while the credit opening is accompanied by a zeroing date, which is quite different. The zeroing date is the date on which the credit must have been zeroed. If you have not drawn on the credit opening during the months preceding the zeroing date, the amount to be repaid for this date will in principle be lower than if you withdrew money during this period. Santander will notify you, by letter, of the approach of the zeroing date, three months before it. Similarly, if you have withdrawn money via My Account, a message will inform you that you have three months to reset the line of credit to zero and therefore to repay the debit balance.

When to opt for the personal loan?

If you know exactly what you intend to spend the money on (purchase of a new car, renovation of the roof or other major transformations), it is better to choose the personal loan solution.

How much can I borrow?

The answer depends on your personal situation. Your status as owner, tenant, or other, your professional status and any loans in progress, have an influence on the amount you can borrow.

By admin

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