Revolving credit or revolving credit

Revolving credit is a consumer credit that provides you with a sum of money, called reserve.

You can use this amount in one or more installments, depending on your needs.

With each refund, the available amount is replenished. For example: if you have a reserve of €2,000 and that you use €500, you still have €1,500. When you pay back €100, your reservation goes back to €1,600.

This credit can be associated with a payment card, which allows you to pay for purchases in cash or on credit.

Revolving credit works differently than depreciable credit:

• Revolving credit allows for flexible use of a cash pool, but is generally more expensive.
• Depreciable credit provides a fixed amount and constant monthly payments, often at a lower cost.

The revolving credit works as a reserve of money that can be used at any time.

You then repay by monthly installments.

Each monthly payment includes a portion of the borrowed capital and interest.

The law requires that a minimum part of the capital be repaid at each maturity.

Interest is calculated only on the amounts used, but rates are often high.

You can take out a consumer credit from:

• a credit institution,

• a funding business

• or an intermediary (merchant, supermarket retailer, mail order retailer, broker,...).)

Revolving credit advertising is strictly regulated by law to avoid misleading information.

The procedure for granting the revolving credit must begin with a maintenance during which the financial institution or intermediary must give you information and explanations about the loan, and check your creditworthiness.

The credit shall be granted by a written contract, on paper or durable support.

The lender sends a free contract offer, which can be delivered by hand or by mail.

The offer commits the lender for 15 days.

To accept, you have to sign and send back the offer.

For a purchase greater than €1,000, an alternative in depreciable credit must be proposed to allow comparison.

The loan contract offer must be in at least size 8 characters.

It shall specify precisely the following information:

1. Identity and address of the lender, the borrower and, if necessary, the credit intermediary
2. Box indicating in large print the essential elements of the contract, namely:
   
   • Credit Type (assigned credit, staff, renewable…)
   • Total amount of credit and conditions for making funds available
   • Duration of credit agreement
   • Amount, number and frequency of installments to be paid by the borrower
   • Debt rate and conditions applicable to this rate
   • and the total amount due by the borrower, calculated at the time of conclusion of the credit agreement
   • All charges related to the execution of the credit agreement
   • Collateral and insurance required, if necessary
   • Amount of notary fees, if necessary
   • If the credit is used to finance the purchase of a good or service, the designation of the good or service and its cash price.
3. Conditions of reimbursement
4. Identity and address of possible sureties
5. Conditions for acceptance or withdrawal of the credit agreement, namely:
   
   • Information on the conditions of conclusion of the contract
   • Mention of the existence of the right of withdrawal, the time limit and the conditions for exercising this right
   • Mention of the prohibition of payments and deposits between the lender and the borrower for a period of 7 days from the acceptance of the contract by the borrower
   • In the case of an assigned credit, a statement of the borrower's rights and the conditions under which they are exercised.
6. Information on the performance of the contract, including:
   
   • Conditions for early redemption, conditions and method of calculating the early redemption allowance
   • Conditions for termination of the contract by the borrower
   • Reminder of the consequences of a borrower default
   • Indication of the compensation due in the event of late payment and the non-performance fees charged in the event of default, and the conditions for adjusting and calculating such compensation and fees
   • A statement of the borrower's right to receive a statement in the form of an amortization schedule, at his request and free of charge, at any time during the term of the contract (except for hire purchase and lease with option to purchase).
7. Information on the handling of disputes, including:
   
   • Presentation of the mediation procedure and its conditions of practice
   • Mention of the court having jurisdiction for payment actions against the defaulting borrower and the limitation period for such action
   • Indication of the contact details of the Prudential Supervisory Authority and the DGCCRF: titleContent.

The credit agreement must also contain the following information:

• Each monthly payment includes a minimum repayment of the capital borrowed, the amount of which varies according to the total amount of the loan.
• The amount of a monthly payment must be at least €15, except the repayment deadline for the remaining balance due, which may be less than €15.
• The term of the contract is limited to one year renewable, and the borrower must be informed 3 months before the expiry of the terms of renewal of the contract.
• When the borrower requests to withdraw the credit, the repayment of the outstanding balance must be staggered, unless the debtor wishes to repay the credit in cash.
• The borrowing rate specified in the contract is a revisable rate and will be modified in accordance with changes in the base rate applied by the credit institution to revolving credit transactions or in accordance with the rate displayed in the schedules that the credit institution publishes to the public.
• The borrower must be informed of the revised borrowing rate in advance by means of a letter written on paper or another durable support, and it must have a period of 30 working days to accept or reject the change.

If the credit institution proposes variable maturities, the credit agreement must provide for a minimum repayment amount of 1% capital for loans of an amount equal to or less than €3,000 and 0.5% capital for loans of more than €3,000.

In this case, the contract must also provide that the repayment period of the credit may not exceed 36 months for credits whose amount is less than or equal to €3,000, and 60 months for credits exceeding €3,000.

Where a card is associated with the contract, the words ‘credit card’ must be indicated in legible characters on the front of the card.

If the card entitles you to benefits, the credit institution must indicate in the contract the possibility of using the card to pay in cash or on credit, and present the effects of the payment on credit.

If the offer of a credit agreement is accompanied by an insurance proposal, the credit institution must provide you with an insurance notice.

The package leaflet must be written on paper or on another durable medium.

It must include extracts from the general terms and conditions of insurance, including the identity and contact details of the insurer, the duration of the contract, the risks covered and the risks not covered.

If the credit institution requires you to take out insurance in order to obtain the credit, it must indicate in the offer of a credit agreement that you have the possibility of taking out insurance with another insurer equivalent to the one it offers you.

If insurance is optional, the offer of a credit agreement must indicate the procedure to be followed in order not to take it out.

Yes. You have a period of 14 calendar days to retract.

The starting point of this period is the day on which you signed the credit agreement offer.

During this period:

• no payment may be required,
• you can reverse your decision without having to justify yourself.

The credit institution must attach to the contract a detachable form to allow you to easily exercise your right of withdrawal.

If you waive the credit, this automatically results in the cancelation of contracts ancillary to the credit agreement, such as the insurance contract.

It is forbidden for the credit institution to record your details in a file following the exercise of your right of withdrawal.

The credit institution must execute the contract, by making the funds available to you or by paying for the purchase of goods or the provision of services, at the time when the credit agreement is perfectly formed.

The consumer credit agreement is perfectly formed when the following two conditions are met:

• You have not exercised your right of withdrawal within the time limit
• The credit institution has informed you of its agreement within 7 months calendar days after your acceptance.

If the credit institution has not sent you its agreement within the period of 7 working daysthat means that your loan application was refused.

But if you receive the agreement of the credit institution after the expiry of the period of 7 working days, you can benefit from the loan if you still wish.

The fact that the credit institution makes the funds available to you after the expiry of the period of 7 working days is also valid for its agreement.

During the 7 working days following your signature of the credit agreement offer, the credit institution shall not make any payment to you in connection with the loan transaction.

Likewise, the credit institution may not require any payment or deposit from you within this period.

But if you have subscribed a assigned credit (i.e. related to a specific purchase), and you make the request in writing, the seller can make the delivery of the good or the provision of service immediately or within a period of time less than 14 calendar days. We are talking about abbreviated deadline.

When the seller makes the delivery of the goods or the provision of services within an abbreviated period, you can no longer exercise your right of withdrawal after the delivery or the provision of services.

When the seller makes the delivery of the goods or the provision of services immediately, you can no longer exercise your right of withdrawal after the expiry of a period of 3 calendar days.

The credit institution may make the funds available to you after the expiry of the period of 7 working days following your signature of the credit agreement offer.

If you exercise your right of withdrawal after the funds have been made available, you must reimburse the credit institution no later than 30 days after sending your withdrawal.

In this case, you must also pay the accumulated interest on the funds paid to you, calculated from the date of receipt of the funds to the date of repayment.

You must not pay compensation in addition to interest to the credit institution.

Throughout the term of the contract, the bank or credit institution must contact you every month one updated statement your revolving credit.

This statement shall include:

1. The situation of your credit

• Date of statement and date of payment to be made
• Amount of capital still to be repaid
• Share of credit still available
• Total amount of amounts due

2. The details of your deadline

• Maturity Amount
• Share of this maturity corresponding to the repayment of the capital
• Share corresponding to interest and any costs
• Cost of insurance when included in the maturity

3. Characteristics of credit

• Rate applied to credit
• (TAEG)

4. Monitoring of refunds

• Amount of refunds made since last contract renewal
• Allocation between repayment of principal and payment of interest and fees
• Estimated number of monthly installments outstanding to fully repay the loan

The statement should also remind you that you can at any time:

• repay all or part of the remaining amount due in advance,
• request a reduction in the amount of credit available,
• suspend the use of the credit,
• terminate the contract.

When the revolving credit is associated with a card giving access to commercial advantages (loyalty, discounts, promotions)...), the credit organization cannot reserve these advantages only for purchases financed with credit. You must also be able to benefit from it when you use this card to pay cash.

If a payment card issued by a credit institution is associated with a deposit account and a revolving credit, or a payment account and a revolving credit, you must clearly mark your choice for the use of the credit.

This choice must be manifested by the express agreement expressed at the time of payment with the card or within a reasonable time, upon receipt of the monthly update of the execution of the credit agreement.

When the credit institution plans to revise the borrowing rate, it must inform you via a letter written on paper or another durable support before the date of application of the new rate.

The credit institution must leave you a period of 30 working days after receiving the information to decide on the rate revision.

If you wish to refuse the review, you must send a written request to the credit institution.

In this case, the credit ends and you must repay the amounts already used in installments or according to the applicable conditions before the attempt to change the rate.

You can repay the revolving credit early, if you wish.

The early repayment may cover part or all of the amount outstanding.

If you make an early repayment, the credit institution must not charge you interest and fees that relate to the period corresponding to the early repayment.

When you prepay more than €10,000 during a period of 12 months, the credit institution has the right to claim an early repayment indemnity from you.

The amount of the early repayment indemnity shall be capped according to the period between the date of early repayment and the end date of the credit agreement.

If you make the prepayment less than 1 year before the end of the credit agreement, the prepayment indemnity is capped at 0.5% the amount of the credit.

If you make the prepayment more than 1 year before the end of the credit agreement, the prepayment indemnity is capped at 1% the amount of the credit.

In any case, the amount of the early repayment indemnity may not exceed the amount of interest due for the period between the date of early repayment and the end date of the credit agreement.

In the event of early repayment, the credit institution shall not be entitled to claim any other compensation or expenses from you other than the early repayment compensation.

The early repayment indemnity does not apply in the following cases

• The credit that gives rise to the early repayment is an overdraft authorization
• The early repayment was made in execution of an insurance contract intended to guarantee the repayment of the credit
• Early repayment occurs in a period when the borrowing rate is not a fixed rate.

The consumer credit agreement must specify how you must proceed if you wish to repay the credit in advance, as well as the method of calculating the early repayment indemnity.

The law provides that the revolving credit agreement is concluded for a duration of 1 year renewable.

If the credit institution plans to renew the contract, it must inform you of the conditions for renewal 3 months before the annual deadline.

Before proposing the renewal of the contract, the credit institution must consult the file of credit incidents and must check every 3 years your creditworthiness as at the time of granting the credit.

After consulting the credit incident file or verifying your creditworthiness, the credit institution may decide to reduce the total amount of the credit, suspend the right to use the credit or not to offer you the renewal of the contract.

If the credit institution offers to renew the contract, but with changes, you can refuse the renewal if the proposed changes do not suit you.

You must do this no later than 20 calendar days before the entry into force of the new contract.

You must return to the credit institution the rejection response slip that must be contained in the renewal terms and conditions newsletter.

You will then have to repay the amount of the reserve money already used.

If the credit institution wants to renew the contract, but you have not used the credit for one year since the subscription or the renewal since the last renewal, it must attach a specific document to the renewal conditions.

This document shall include the following:

• Identity of the parties
• Nature of the operation
• Amount of available credit
• The amount of repayments by maturity and by credit fractions used.

The credit institution must suspend the use of the credit if you do not return the signed and dated document no later than 20 days before the expiry date of the credit agreement.

The suspension can be lifted at your request, and after a new credit check.

You must request that the suspension be lifted before the expiry of the one-year period following the date of the suspension of the contract, otherwise the contract will be terminated automatically.

Where the contract is accompanied by a credit card, the levying of the card fee shall not be considered as a use of the credit.

The credit institution may also decide at any time to reduce the amount of the credit or to suspend its use, if it has information that shows that your creditworthiness has decreased since the conclusion of the contract.

He must inform you in advance via a letter written on paper or on another durable medium.

The credit institution may reinstate the full amount of the credit or lift the suspension of its use after a new credit check.

During the credit suspension period, you must repay the amount of credit already used.

You may also request at any time a reduction in the maximum amount of credit, suspension of the use of credit, or termination of the contract. In this case, you must repay the amount of the credit already used.

In case of difficulty of payment, your credit institution shall study the possibility of renegotiate the loan according to your personal situation, via one of the measures following:

• Total or partial refinancing of the credit agreement
• Extension of the term of the credit agreement
• Total or partial suspension of monthly payments for a given period
• Change in the interest rate
• Realignment of the schedule (e.g. reduction of monthly payments)
• Partial debt forgiveness and debt consolidation.

From 1^er payment incident, the financial institution is obliged to inform you about the following:

• Risks Incurred
• Amount due
• Solutions to regularize your situation

This information must be provided to you on paper or otherwise durable support.

The lender must also notify you in the event of an incident being reported to the refund incident file.

The financial institution may decide, even if you can no longer pay your insurance premiums, to pay them temporarily in your place, so that you do not lose the benefit of the guarantees provided for in the contract.

If the credit institution has required you to take out insurance for the loan and you have taken out this insurance with an external company, the insurer must inform the credit institution of the non-payment of your insurance premiums.

If you do not pay your monthly installments, the credit institution has the right to demand immediate repayment of the outstanding principal and interest overdue but not yet paid.

The outstanding principal shall bear interest for the credit institution at the rate of the loan between the date of the delay and the date of your payment.

If the loan is used to finance a lease with a promise to sell or a lease-purchase agreement, the financial institution has the right to demand the return of the property and the payment of the rent due but not yet paid.

In the two cases, the credit institution may also claim compensation from you to cover the damage caused by the non-payment of monthly installments.

This allowance may not exceed 8% of the remaining balance due.

If the financial institution decides not to require immediate repayment of the outstanding principal, it may offer to renegotiate the loan according to your personal situation, through one of the following measures:

• Total or partial refinancing of the credit agreement
• Extension of the term of the credit agreement
• Total or partial suspension of monthly payments for a given period
• Change in the interest rate
• Realignment of the schedule (e.g. reduction of monthly payments)
• Partial debt forgiveness and debt consolidation.

Any change must be subject to a endorsement to the contract, delivered on a durable medium.

The maximum number of maturity deferrals is 2 per year.

When the credit institution grants you a maturity deferral, it must suspend the use of the credit until you have repaid all the deferred maturities.

Deferrals must not give rise to charges other than interest and insurance contributions.

Deferral periods may result in the maximum repayment period of the revolving credit being exceeded.