Today, it is not uncommon to need to make credits. Whether it is loans to compensate for an occasional cash flow, a revolving credit allowing to have a reserve of money or a mortgage, the demand for credit can be long and tedious. To build a credit application file you will need to inform yourself about the various credits available as well as take stock of your financial situation and your ability to repay.
When applying for credit, you must make every effort to have this credit application accepted. Your project will depend on the outcome of this credit application. To make it easier for you to apply for a credit application, we will take stock of what you need to know: what is a credit application? how to perform it? what to watch for? What are the criteria to be met when applying? which credit to choose? how to determine your budget? In short, thanks to this article you will have all the keys to make the best of your credit application and realize your project.
What is the credit demand?
When you want to make a credit, it requires the realization of a credit application. A credit application is nothing more than a file that will allow you to apply for a credit institution to obtain the credit necessary for the realization of your project. For this credit application, you will need to consolidate a number of pieces that the credit agency you have called may ask you to build the file for your application.
However, before applying for credit, it is important to have targeted your needs. What is your project? You want to buy a car? Do you need liquidity? Would you like to become an owner? How much can you borrow? What is your debt ratio? What are the interest rates applied to the credit application you want to make? So many questions that will allow you to make the best credit request and see it accepted by the organizations you have chosen.
Demand for credit and interest rates: how to navigate?
When applying for credit, find out about the interest rates in effect when you want to apply for credit. Interest rates are very important when you apply for credit. Indeed, to apply for credit is certainly a free act but a credit is not free. When you go to make a credit, it will cost you money. The cost of your credit is determined by the interest rate that will have been negotiated when you apply for credit. In other words, the interest rate of a loan will allow you to determine how much you will pay to the lender based on the principal you have borrowed.
The interest represents the income of the credit institution for having lent you that amount of money. Thus, the higher the interest rate, the higher the amount borrowed, the higher the cost of your credit. When applying for credit, you will need to think carefully about the amount borrowed but also the interest rate at which you will make your credit.
Besides the fact that this is a form of remuneration for the lender, the interest, calculated based on the interest rate and the amount you have borrowed, are a guarantee for the lender in case you can not honor your loan. Our advice is therefore to find out about the rates in effect at the time you make your credit application. Indeed, when you apply for credit, you will have to look at two rates. First you will need to inquire about the reference rate.
This rate is set by the Central Bank
This is a reference, the rate of your credit can not be lower than this reference rate. If so, beware of the credit agency you are applying for. It is the same for the rate of wear, which reflects the maximum rate that can take your future credit. Be aware that these two rates are reviewed quarterly, inquire and pay attention to the rates that will be proposed when you apply for credit. Whether it is too strong or too weak, a rate of interest that does not fall in the range of reference rate and attrition rate suggests that your credit application will not be legally admissible.
In addition, do not hesitate to compete with the credit institutions you have chosen. You can easily find on the internet indications on the best interest rates for your credit. Take the time to study the different proposals. Remember, the longer you borrow, the more expensive your credit will be. Indeed, borrowing in the long term is certainly advantageous because it will reduce the amount of monthly payments but it will have a cost.
The more you increase the duration, the more the credit institution takes risks to accept your credit application. To mitigate these risks, the interest rate will be higher, this will allow the organization to reimburse itself in case you have difficulties to honor your credit. Then perform simulations by increasing or decreasing the repayment period, the amount of the monthly payments … Determining its repayment capacity is an essential step in applying for credit. With this you will be able to make the best credit request and thus obtain the best credit offer for your needs.
Credit Application and Borrowing Capacity: How much can you claim?
Credit means that you are able to repay it. When you visit the sites of credit agencies or agencies of credit organizations, since September 1, 2010, following the Lagarde law, you will read the following “a credit commitment and must be repaid. Check your repayment capacity before you commit”. So, when you apply for credit, after defining your project and your needs, make sure you can repay it. For that nothing more simple, it will be enough for you to calculate your capacity to borrow. With loan calculators you can set the monthly budget that you can allocate to your next loan.
Remember that you must not find yourself in debt distress. In this case, your credit application will be systematically refused. It is important to keep in mind that the portion of your budget intended for the repayment of your debts must not exceed more than one third of your income. The calculation of the capacity to borrow will take into account various parameters such as the repayment period and the interest rate of your credit, hence the need to perform several simulations before applying for credit.
Thanks to the internet, you will be able to make good numbers of credit request simulations so do not hesitate. Although it may seem tedious, it can save you a lot of money. When you make a credit for money, saving money is important. Calculating your repayment capacity will allow you to make a better credit request according to your expectations and your resources. Remember that the situation of over-indebtedness can have a big impact on your daily life.
Indeed, being over-indebted, you may be listed on the registers of the Bank of France. You could then have trouble getting payment methods (credit card or checkbook) or be banned banking. So do not hesitate to take the time to calculate your repayment capacity, calculating monthly payments that you can allocate to your new project on a monthly basis. Effector all the simulations needed to make the best application for credit, one that will not fail you, one that will meet your expectations but also your budget.
How to apply for a credit?
At first, you must have located your request. What credit do you want to achieve? Do you want to apply for money without having a defined project? make a request for personal credit. You want to buy a property like a car? apply for auto credit. You want to have available a sum of money that you can use in several times? apply for revolving credit. You want to invest in real estate, a demand for real estate credit will be necessary.
In any case, each credit application will be different. The documents to provide, the process but also the deadlines may vary according to the credit request you will make. In addition, it is not uncommon for the credit application to be different for the same credit depending on the organization you have used for this credit application. It is therefore very important to be well informed before applying for credit to ensure the success of the latter.
Once you have targeted your credit institution, that you have gathered all the necessary information requested by the credit agency, you will only need to apply for credit. For this, you can go directly to an agency of the credit agency you have chosen or make your request directly the website of the organization.