Online credit application
The consumer credit allows individuals to have a sum of money loaned by a specialized establishment in order to finance the purchase of consumer goods or services such as the purchase of a new vehicle. In order to obtain these funds, consumers can turn to different actors.
Historically, in order to obtain a loan, the borrower had to approach his usual bank (or canvass a bank). During a physical interview with a bank advisor, the latter had the opportunity to ask for a sum of money to finance a project. The mission of the specialist advisor was to support his client in his approach and guide him towards a solution adapted to his needs. He then had to position himself on the borrower's request and make him an offer containing the amount borrowed, the duration and the monthly repayment installments. The borrower was not free to decide how much he could borrow or what monthly payments he wanted. The advisor determined according to the client's income and expenses (debt ratio) and then made him a proposal. This process was sometimes long and difficult. If the borrower wanted to have several offers in order to compare and choose the best one, he had to go to different banks in order to make different requests. The process could therefore take several days or even weeks. In addition, the bank's response was very rarely instantaneous. A delay of several days between demand and supply was frequent.
In recent years, with the development of the Internet, many banking establishments have settled and developed on the web. Today, dozens of websites offer consumer credit solutions to individuals. This development was made possible by the ease of use of the various interfaces. It is now possible for a consumer to request credit from home (or elsewhere) at any time and on any day. In addition, before any request, he can perform various simulations before making any decision. Many websites offer very easy to use simulators allowing the borrower to simulate any request. First, he must inform the purpose of his financing (car purchase, loan work, marriage, personal project, etc.), then the amount and finally the monthly payments (or duration) desired. Once these various elements have been entered, he will obtain a result indicating the cost of his loan with the APR applied (overall effective annual rate corresponding to the key rate applied as well as the various costs decided by the lender). This different information will be available on all the results of the different sites offering payment solutions. The borrower is free to make different simulations with the number of establishments he wishes. These simulations do not engage him in any way, so he can simulate as many times as he wishes for current or even future projects. It is free to adjust the amount borrowed or even the amount of monthly payments. These simulators will allow him to learn about the different rates applied according to the different situations and amounts borrowed. Thus, he will find that the longer the repayment period, the higher the rate applied. Likewise, the more uncertain the project (work loan), the higher the rate will be. The borrower is autonomous. He will then be able to compare the different results and thus make his request (s) to the organization offering him the best offer.
If desired, the borrower can seek professional advice online. All the credit organizations have set up telephone lines in order to be available to their customers and to support them in their process and answer all of their questions. Frequently asked questions are also available on the various sites. This space includes all of the most frequent questions such as "what is the deadline for obtaining funds?" "Or" Is it possible to anticipate the repayment of my monthly payments? ". These sites are very educational and generally answer all the questions that the borrower might have.
By making his various requests on the Internet, the borrower saves time insofar as he does not have to go to the various points of sale in order to make several files. He is not constrained to the different opening hours of establishments. On the Internet, he can even go to specialized “comparison sites” in order to save even more time and enter the essential data for his request only once (amount, duration and monthly payments). The “comparator” site will tell him the best available rate for his financing and direct him to the establishment's merchant site so that he can make his request.
The borrower also saves time when applying online because the response is usually much faster than the responses provided by the banks. An answer in principle is given on the Internet at the end of the entry of all the personal information of the borrower (family, professional, financial situation, etc.). Following the complete sending of the file, a final response is provided on average in 48 hours. The speed of processing the request is often a significant advantage for many households who need to obtain credit quickly.
Households no longer hesitate to make their request on the Internet for low consumer credits. It will also be much easier to get a positive response to a request made online than to a request made at a physical bank.
Banks are still solicited, especially for large sums of money borrowed. Indeed, it is important to be accompanied by a professional when it comes to borrowing a substantial amount. The professional can advise and guide the individual according to his needs and personalize his various monthly repayment installments so that the latter does not find himself in a delicate situation. Banks are less flexible but more rigorous. From a certain amount, it is important to have stricter control in order to avoid household over-indebtedness. It should be noted that since 1990, the number of over-indebtedness files filed by French households has increased by 140%. Of these over-indebted households, the debt averages $ 41,254 (including mortgage). Currently, when a consumer credit is taken out, no means are put in place to verify that the borrower has no other credit debts. The latter is considered in good faith by banking establishments. There are no common files grouping together all the loans taken out by households. Dealing with a natural person could have the consequences of reducing misrepresentation. On the Internet, it is much easier to circumvent the truth or to lie by omission (deliberate or not). Although the sending of supporting documents is mandatory, the checks by these bodies are less thorough. It is very easy to obtain a consumer credit for a small amount or even to benefit from payment facilities such as "3x payment".
These are often offered by consumer goods merchant sites. Often the ease of payment does not entail any cost but it is not rare for these sites to offer deferred payments or in several installments but with remunerative rate. For this funding, there is almost no control. The borrower is therefore free to multiply them and to get into debt as they make their purchases without realizing it.
When the borrower applies for credit on the Internet, it is very important that he learns a minimum of his commitments and the financial risks to which he is exposed. The various websites have the obligation to remind that any credit commits the borrower to repay it, regardless of the amount and the duration of the credit. Even for minimal amounts, the borrower agrees with the establishment to repay them regardless of his future financial situation (job loss, disability, death, etc.). Different sites also offer advice sheets informing consumers of the different products but also of their borrowing rights. Government sites also warn about the practices applied by these organizations. For example, it is not uncommon for them to offer revolving credit in the first place as a financial solution. However, they normally have the obligation to offer the personal loan first. This practice is common insofar as revolving credit is much more profitable for the lender (high applied interest rates). As a result, revolving credit is promoted on merchant sites using means that attract the attention of the consumer (large print characters, flashy colors, boxes, etc.).
The borrower must know the legislation in order not to be a victim of these practices. He must be able to benefit from the best solution, personalized and adapted to his situation. Advantages and disadvantages are present whatever the chosen professional (banks or Internet), the borrower must choose the situation which suits him best and the most secure according to his situation.