You are an individual or a professional in urgent need of cash for a reasonable period of time, cash credit is a possible solution.
Depending on your status, this cash credit will allow you to have the necessary cash either for the proper functioning of your activity for professionals, or to meet an unforeseen expense for individuals.
Cash credit for individuals:
For individuals, cash credit is above all a personal loan as are also the work loan or the car loan.
Cash credit: a personal loan without proof
A personal loan is a type of consumer loan that will finance a project without dipping into your savings. It is a credit agreement that makes a certain amount of money available over a given period. The monthly payments paid by the borrower will allow the repayment of this credit during this period.
The fact of justifying the project is not a necessary condition for its granting. It can be an unforeseen expense, the financing of a project such as a wedding, a need for cash in order to face a complicated end of the month.
A cash loan does not need to be justified by a specific expense. Indeed, the amount allocated through this credit is not allocated to a designated product or service.
It is this freedom as to the use of this loaned sum that makes it its major asset for individuals.
The terms of cash credit:
The cash loan being above all a personal loan, the same conditions are therefore applicable in terms of amount, duration or in terms of rate.
The amount of the cash credit is between $ 200 and $ 75,000. The Lagarde law dating from 2010 set this maximum limit of $ 75,000. Before this law, the limit for this type of credit was $ 21,500. This maximum amount is intended to protect the borrower because below and beyond this amount the borrower no longer benefits from the protection of the Consumer Code.
Regarding the repayment period of the cash loan, this can extend between 4 and 84 months, with rare exceptions. The duration is adapted according to the overall amount of the project for which this cash requirement is planned.
The rate assigned to a cash loan is called the APR (annual percentage rate). It includes the base interest rate, fees, commissions, various remuneration and possibly insurance premiums. This rate is fixed and cannot vary during the term of the loan. It is generally between 2.5% and 7.7%. On the other hand, it cannot exceed the usury rate, that is to say the maximum legal rate fixed by the Bank of United States. This is a significant point of vigilance for individuals because the rate for a cash loan varies significantly depending on the lending organization.
Usually, a relatively low application fee will be included in the overall cost of the cash loan for the borrower. Indeed, at most, they will not exceed 1% of the total credit, or 75 US dollars at most.
The cash credit is subject to a withdrawal period protecting the borrower. This period is 14 calendar days from the signing of the cash loan contract. This gives the borrower time to renege on his commitment and he does not need to justify himself if he retracts. This period therefore conditions the release of the sums. Only after these 14 days will the funds be available in the borrower's account.
Subscription to cash credit:
You can contact various specialists for obtaining cash credit such as a bank, a personal loan broker or other personal loan organizations (insurance companies, supermarkets, online financial organizations, etc.)
It is these financial organizations that will analyze with you the loan best suited to your needs, taking into account your financial situation.
The offers for cash credit are numerous and different depending on the organization, so it is advisable to use online comparators to simulate this loan and find out the best rates offered.
The borrower will see his loan accepted according to his profile. Indeed, there are conditions of acceptance such as a stable job, correct and regular income, a favorable repayment capacity. This indebtedness should not exceed 33% of the borrower's income. Indeed, as specified in the Lagarde Law of 2010, a loan commits you and must be repaid. You must therefore check your repayment capacity before committing.
The lender has obligations to the borrower. These obligations must appear in the loan agreement, namely: its identity, the amount of the cash loan, the monthly payments, the duration, the APR, the application fees, the total cost of the amount, the withdrawal period, the possible indemnities in case of late payment.
The advantage of the cash loan is therefore important for individuals because they do not need to justify what this loan is intended for. This certain advantage can also become its main disadvantage because if the project for which this loan is taken out cannot be carried out for one reason or another, the monthly payments will continue to run for the borrower.
Individuals are not the only beneficiaries of cash credit, it is also intended for professionals.
Cash credit for professionals:
For businesses, cash credit provides the cash flow necessary for their operation on a temporary basis, and for a fixed period.
First of all, you should know that the cash flow of a company represents all the cash available in cash or in bank.
There are three categories of corporate cash loans: overdraft, overdraft, and countryside credit.
The overdraft facility:
The overdraft facility is a fairly widespread and flexible cash credit granted to professionals. Its aim is to deal with occasional cash flow shifts, particularly during certain periods of the year. It is above all akin to ad hoc tolerance. It is a tacit or verbal acceptance that the banking establishment will grant to its client company.
In practice, this tolerance allows the beneficiary company of this type of cash loan to return its debtor account for a short period. It is a unilateral measure granted for a few days at most, by the banking establishment. The latter fixes the amount and an often high personalized interest rate. The bank can modify the conditions of this overdraft facility, is under no obligation to renew this loan, and can cancel it at any time.
The discovery :
This type of cash credit for companies is close to the overdraft facility in practice, but it is in particular its duration that will differentiate them. We are talking here about a period valid for a few weeks or a few months. The discovery is also differentiated by the fact that it materializes materially by a convention.
The overdraft authorization may be contained either in the initial account agreement or be the subject of a separate contract. As this loan is approved, the bank must respect the terms and cannot suspend its effects without respecting a termination period legally set at 60 days.
Banking establishments ask for more guarantees to grant this type of cash credit, for example, for small businesses, a manager's guarantee.
This form of cash credit for professionals is intended for businesses that are subject to seasonal activity. For example, a manufacturer of Christmas decorations must finance fixed costs such as salaries, rents, supplier invoices throughout the year. However, it is only at the end of the year that its sales are made.
This credit makes it possible to meet the cash requirements over several months, the repayment will be made as and when sales are made during the peak of activity of the company.
Campaign credit is more risky for banking establishments as it is linked to forecast sales. In this sense, an in-depth study of the financial situation will be carried out even before the granting of such a cash credit and guarantees will be more numerous and specific.
Concretely, it can take three forms: credit by cash, credit by ticket or advance on goods. Cash credit allows a business to be in debt for the duration of the campaign. Credit by note, on the other hand, allows the company that subscribes to it to issue a negotiable debt instrument. Finally, the advance on goods will finance inventory.
As a professional, it is your activity and especially the duration of the desired loan that will allow you to make a choice among these 3 types of cash credit. You can also consult comparators to simulate the impact of cash flow credit on the company's finances.
Thus, individuals and professionals alike have all the keys in hand to consider taking out a cash loan.