Presentation of Cetelem
Cetelem is a French public limited company created in 1953. This company belongs to the BNP Paribas banking group. Originally specializing in consumer credit (assistance in financing consumer goods and services), it has been offering mortgage solutions since 2007. Thus, Cetelem offers various types of loans on the Internet. The customer can request to obtain a personal loan, a revolving credit, a mortgage, a car rental (LOA or LDD) or a credit buyback.
In addition to credit, Cetelem offers credit cards allowing the user to pay cash or on credit. The Aurore card is a Visa card, it works like a blue card but also allows you to pay in several installments according to the terms provided (interest rate applicable). Due to its various partnerships, the Aurore card offers payment facilities (3x free of charge, for example) in certain brands. The cost of this card is relatively low, the high end card is $ 36 / year.
It is also possible to save with Cetelem. Individuals can open a passbook A type savings account as well as a Cetelem savings account. The passbook rate is legally fixed (maintained at 0.75% in August 2016) unlike the Cetelem savings passbook, the rate of which is chosen by the company. Currently, the rate of this passbook seems more advantageous than the passbook since it is guaranteed at 2% for the first year upon subscription. On the other hand, for booklets already open and in progress, the rate of remuneration is 0.8%. The consumer must be aware that the rate presented at the time of subscription (the promotional rate) will not remain the same when the first year has elapsed.
The Cetelem company works with partners in order to offer insurance guarantees (especially auto) on its website. Indeed, it is offered to the consumer to take out auto insurance with direct assurance (a subsidiary of the insurance company AXA). The fact of offering these insurances (auto, assistance, mechanical breakdown and purchase value) allows Cetelem to retain its customer. On the same site, the latter can apply for a personal loan for the purchase of his new vehicle, but he can also insure it. This saves time for the consumer who will not have to canvass other professionals.
The Cetelem search engine
Cetelem offers individuals a wide choice of loans, particularly consumer loans. The home page opens directly on a search engine made up of 3 tabs.
The consumer will be asked for his project (car, work, various projects, etc.), the amount and the monthly payments (or duration) desired. The amount of the loaned sum must be between $ 500 and $ 75,000. The duration of the credit depends on the amount chosen and the type of loan. For example, for a car loan in the amount of $ 10,000, the credit must be repaid within a maximum period of 84 months (ie 7 years). However, for a work loan of the same amount, the maximum repayment period will be 96 months (8 years).
Once this information is completed, the search engine displays the result for the loan application. This page will show the project and the amount requested. Then, the monthly payment will be specified as well as the credit duration. From this information, the total amount due will be calculated. It will obviously depend on the amount requested but also on the rate applied. A fixed borrowing rate is indicated but also the fixed APR (Global Effective Annual Rate). The latter includes the fixed borrowing rate as well as all the fees that will be applied by Cetelem (administration fees for example). The APR allows the borrower to know the real cost of his loan. The website specifies the total amount due in order to avoid the borrower from calculating the cost of the loan himself. This amount corresponds to the amount borrowed to which is added the interest due (calculated thanks to the APR).
It is interesting to note that the longer the duration of the loan (and therefore the lower monthly payments), the higher the cost of the loan will be. This higher rate is explained by a greater risk for the lender of lending a sum of money over such a long period. The borrower is therefore advised to reduce the term of his credit if possible. He can then benefit from better interest rates and sometimes even commercial offers.
A last tab appears on the results page. This is an optional insurance proposal. Unlike the mortgage loan, the borrower is not legally obliged to take out loan insurance when it comes to consumer credit. This will be insurance related to the death or disability of the borrower. Once the loan is obtained, the borrower is required to repay it regardless of his situation. Thus, even if he dies, his debt is automatically transmitted to his estate (surviving spouse, children, close relatives, etc.). Loan insurance would intervene in this situation to avoid the transmission of the debt and to repay the credit in place of the borrower. This optional insurance obviously has a cost and therefore an impact on the amount of monthly payments. In any case an establishment can oblige the borrower to take out it, but it often happens that the APR depends on it and is higher in the eventuality where the borrower would not take out insurance.
After knowing these different elements, the consumer is free to ask to obtain the loan or not. A tab offers the borrower to make a request to obtain the funds under the conditions chosen. Following this, a certain amount of information will be requested from the individual. He will be asked for his identity, his address, his family situation, his professional situation and his financial situation. The future borrower will have to certify that the object of this loan will not be the repayment of another loan in which case the client will be redirected to the repurchase of the loan.
It is up to the borrower to respond seriously and in good faith. This various information will be verified by the establishment upon receipt of the complete file.
Once this part is completed, the borrower will be offered optional insurance. He will be presented with different formulas to guarantee his death or even his loss of employment. If he chooses not to take out insurance, a tab explains to him that in this case, his debts will be transmitted to his beneficiaries.
An answer in principle will be delivered as soon as the computer entry of all the borrower's information is complete. If this agreement is positive, the various information concerning the credit will be included. The borrower can then download (or receive by post) the contract (with a volume of 44 pages) in order to obtain his loan. This contract must be returned duly completed to Cetelem together with its last two pay slips (or tax notice), proof of address, a bank identity statement and a copy of the identity document.
The file will then be studied by Cetelem who will then deliver its response and issue its offer. Note that at this stage the consumer is not engaged. He will remain free not to accept Cetelem's offer once the final offer has been received.
The consumer will have a customer area in order to consult the progress of his file. The status of his file will be listed there, he will also be informed if a document is missing from his file. Upon receipt of the complete file, Cetelem undertakes to study it within 48 hours. Following the study, Cetelem will send a definitive response within 48 working hours to the borrower.
Acceptance of the offer
Once the offer has been issued by Cetelem, it is valid for 15 days. During this period, Cetelem cannot change its offer by applying a higher rate for example. He will be free to do so if at the end of these 15 days the borrower has not come forward.
If the borrower accepts the offer, he still has a withdrawal period. A minimum period of 14 days is legally provided. During this time, the borrower may go back on his commitment and no longer wish to take out a loan. He will dispose of the funds once this period has elapsed. In order to speed up the release of funds, the borrower is free to waive his right of withdrawal. He will have to do so in a non-implicit and informed manner. The funds will then be released in principle within 48 hours by Cetelem.
Once this period has expired, the borrower is financially committed to Cetelem. He will in any case have to repay the sum of money borrowed plus the interest applied. In order to recall this commitment, Cetelem features on a number of its pages this sentence: “a loan commits you and must be repaid. Check your repayment capacity before you commit ". It is up to everyone to check their financial capacity before taking out a loan, even for small sums. The borrower must be aware of the danger of over-indebtedness.
Cetelem is very active in the consumer credit market. In general, it appears in the first Google results following a search for “consumer loan” or “auto loan”. Because of its competitiveness, 84% of its customers are satisfied and, for example, on average 1900 car purchases are financed per week.