Certain information must be communicated to the borrower by the lending institutions.
What is this information and what is its usefulness? As a borrower, do you also have mandatory information to communicate to the lender?
Mandatory information relating to the contract
The lender is required to include a certain amount of information in his offer of consumer credit:
- The details of the lending institution: identity and address.
- The nature of the credit envisaged: personal loan, assigned credit, revolving credit.
- For an assigned loan: detail of the credit-financed good or service.
- The amount of the sum borrowed, as well as its conditions of availability.
- The expected repayment term, which will ring the end of the contract. We must also find the number of deadlines, their details, as well as the precise schedule of repayments.
- The total amount due.
- The precise amount of the different expenses.
- APR (annual percentage rate of charge): the contract must include explanations on how it is calculated. Note that the loan offer being valid for 15 days, if you have not signed it after this period, the APR may increase.
- The details of the indemnities due in the event of late payment of a monthly payment.
- The conditions surrounding the withdrawal period, as well as its implementation: you have 14 days to retract after signing the offer.
- The mention of the articles of the Code of consumption on the minimum period of reflection.
- The details of the deposit if there is one (identity and address).
- The terms of prepayment of the loan, as well as a detail of the method of calculating the potential indemnities to be provided.
- The conditions of termination of the contract.
- Your right to request an additional copy of the loan offer, free of charge.
- If the loan is underwritten as part of a credit redemption, the lending institution must also let you know if the new loan will result in debt that is longer or higher than your previous maturities.
- The address of the ACPR (Prudential Supervisory Authority and resolution), and that of the local services of competition and the repression of frauds.
Note: At least once a year, the lender must provide you with the exact amount of the outstanding capital. For a revolving loan, this information must be given to you monthly.
Mandatory information relating to loan insurance
Even though there is no legal obligation to insure a consumer loan, the lending institution may require the presence of borrower insurance as a condition of obtaining credit.
If you are required to purchase insurance, the lender is required to provide you with its monthly and global average standard cost. The lender will offer you a group insurance contract, which you are not required to choose. You remain free to opt for the insurance of your preference.
Note, however, that you are obliged to offer a contract that has at least the same guarantees as the group contract. Otherwise, the lender will refuse you this insurance.
Borrower: What information do you need to provide to the lender?
As a subscriber of consumer credit, there is also a certain amount of information that you have the obligation to communicate to the institution that grants you the loan:
- You will have to fill out a medical questionnaire that will allow the insurance company to get an idea of your state of health and therefore, to take the measure of the degree of risk that it will take by ensuring your credit.
- You must answer in a sincere and exhaustive way and especially, if your situation evolves, to keep informed your insurer so that it can evolve your guarantees if need be.
Warning: if you intentionally make a false declaration to your insurer, it may cancel the contract (Article L. 113-8 of the Insurance Code).
This information is related to group insurance, and only if the lender imposes insurance.