Online credit in United States
What is an online loan?
Online credits are credits directly negotiable on the Internet. Their development is fairly recent. Organizations, most often online banks, provide a dematerialized service in order to grant these credits online. Therefore, it is necessary to turn either to the Internet sites of the usual banks, or to online banks, or to organizations specializing in the granting of loans.
First of all, you have to know what a loan is. A loan is an act of making money available by a natural person (an individual) or a legal person (banks, organizations specializing in lending) to another, in the form of a loan. An online credit corresponds to the same act of making money available, with the difference that it is contracted directly online, on the Internet. From then on, online credit corresponds to the subscription of a credit by correspondence.
The most commonly performed online credit is consumer credit, that is, credit extended to individuals by banks or financial companies to finance purchases of goods and services (e.g. household equipment, or even a vehicle). In contrast, there are real estate loans, which can also be done through online credit, in order to acquire real estate.
Whether it is a mortgage or a consumer loan, online credit works the same way as credit in general. That is to say that this credit implies a reimbursement from the debtor (the individual who contracts this credit online) to the creditor (the online bank). Consumer loans are loans with an amount between € 200 and € 75,000 and with a repayment period of more than 3 months. This repayment is most often spread over several months or several years depending on the amount loaned by the creditor.
For a legal definition of the terms of credit, lender, borrower, refer to article 311-1 of the Consumer Code.
How to subscribe to a credit online?
The majority of online loans made being consumer credit, a quick presentation will be made of the purchase of a mortgage online. To take out a mortgage online, the process is quick and easy. You must first complete an online credit application form on the Internet on the website of the financial institution with which you wish to proceed with this credit (the application fees are generally free), then it will suffice for the borrower ( the individual) to send supporting documents by email (personal situation, income, etc.). Then, following the filing of the loan application, an advisor contacts the individual in question to discuss this file.
With regard to online consumer credit, you must also go to the online sites of the banks or financial organizations that interest you in order to compare them. Similar supporting documents will be required (your personal, professional and income situation). Once the online credit application has been made, a wait ranging from 48 hours to 1 week will be necessary for your file to be processed. Subsequently, if the response from the financial institution is positive, you will receive the loan offer by mail which will have to be signed and returned. Some sites may only require an electronic signature, directly on the organization's site. This process is also quite fast.
Advantages and disadvantages of online credit
The advantages of taking out a loan online are numerous. The main ones are the possibility for individuals to contract these loans from their home, without having to go to the headquarters of the establishment in question, and in fact, that there is no waiting between the moment when the person decides to take the loan and when they can have an appointment with a bank advisor.
In addition, online credit has the advantage that it allows individuals to take the time to learn about several banks or financial organizations and to be able to make a choice after making a comparison (which is obviously essential to find the best credit rate or the best advantages offered). Indeed, when a loan is contracted directly in a branch, the individual must first tour all the branches before deciding, while with online loans, it is a faster process. and easier.
In addition, the use of these online sites and the forms to be filled out are generally free. It is also recommended to pay attention to financial sites that would be paid for. As online credit is taken out from home via the Internet, project adjustments are also generally free.
In addition, the subscription of an online credit gives the right to a right of withdrawal during the 14 days following the provision of funds by the lender (article L311-15 of the Consumer Code).
Online credits, however, also have drawbacks. The first, which is closely related to the terms "online" is that the individual wishing to contract a credit online is faced with a lack of human contact, that is to say directly with an advisor as happens in a financial institution. Thus, when the borrower has questions to ask, he can only do so by email, or by calling the customer service of the organization he has chosen. However, sometimes the customer service of these online organizations is not efficient enough. The problem that could arise from this situation is that the borrower cannot ask the questions he wants, and get an adequate answer from them.
The absence of human contact also generates a service that is not personalized. Indeed, by physically going to a bank, an advisor is there to provide us with answers throughout this credit application, then until the end of the repayment. However, when we take out a credit online, there is no human contact and when we call customer service, the person who answers us can change with each call and the file is simply retrieved from their archives. .
Requirements of organizations to take out credit online
Even if online loans seem more flexible than loans contracted directly in branch, banks and organizations specializing in lending need documents from the individual. These requirements are intended to avoid over-indebtedness of the borrower, but also to check his solvency, that is to say his ability to contract and repay this credit online.
The supporting documents to be provided to banks are listed in article D311-3-3 of the Consumer Code, replacing article L311-10 of the Consumer Code.
Thus, online banks require first to know the personal and professional situation of the borrower, but also his income. Documents are therefore required relating the financial situation of the individual (his income and expenses), his present and future capacities and his guarantees. The following documents are thus required: an up-to-date identity document, recto / verso, a Bank Identity Statement (RIB), a proof of residence invoice of less than 3 months and proof of income. Certain additional documents may be requested by the lender, which will then be mentioned on the online credit offer that will be sent to the borrower.
Some people are banned from banking. That is, some people issue bad checks ("wooden checks") or incur debt, which is recorded by the Bank of United States in two files, the Central Check File (FCC) and the national file of personal loan repayment incidents (FICP). The Bank of United States identifies bad payers and allows banks to access these records to determine if the individual is eligible to borrow. This also applies to judicial bans.
Legal provisions concerning online credit
As mentioned earlier, credit is a form of contract subject to the legal rules of the Consumer Code. Online credit therefore does not disregard these rules and is also regulated by law. The articles concerning consumer credit are articles L311-1 to L312-94 of the Consumer Code.
This code was written with the aim of protecting the consumer, and therefore the borrower, and certain rules are also imposed on financial organizations. In particular, an obligation to inform the consumer, because he does not always have the tools to understand what is offered or requested. For example, article L312-12 of the Consumer Code imposes on the lender a pre-contractual obligation to provide information. This obligation requires the lender to provide the information necessary for a good comparison of the different offers, and thus allows the borrower to understand the extent of his future commitment.