In a world where speed has become essential, online credit has naturally imposed itself on conventional credit. Effective way in case of temporary need for financial contributions, its operation remains unclear for most people. Back on nine key points to master the credit online:
What is an online credit?
It must first be borne in mind that a credit is an act by which one person makes a cash advance to another and the amount of which must be repaid within a generally agreed time. Credit has a very ancient origin, even preceding the birth of money; the modern form of the loan appeared gradually from the fifteenth century and experienced a considerable boom with the expansion of banking institutions during the Industrial Revolution in the nineteenth century. Today, there are different types and families of credit depending on the destination that is made funds.
The operation then slowed down all kinds of procedures for which credit was needed, which could be dramatic when it was intended to pay an unexpected expense.
Credit institutions have redesigned the system and started to make credit by telephone in the early 1980s. The means of applying for credit have subsequently evolved along with the emergence and democratization of new telecommunication technologies. This is how the Minitel became a credit application tool; then, from the 2000s, internet. This evolution has allowed the lenders to expand their audience and realize savings.
This modern online credit system is still in perpetual motion. Indeed, while the existence of credit demand by internet is now widely available, directly online trading remains a recent innovation; at this point that many credit organizations are not yet mastering it (which is why it is still difficult to deliver an online mortgage right now).
Online credit is in fact a product identical to conventional credit. Offers and expertise are similar, which is why both contracts follow the same legal regime.
Nevertheless, the advent of online credit has made it possible to reconcile two key factors of servicemodern: speed and simplicity. With a simple internet connection, the potential borrower can complete the files for his application and have a precise idea of the amounts and conditions of the loan by doing simulations. Connected life has accustomed us to meet our needs as quickly as possible; and we must admit that our desires are often revealed during our free time, that is to say in the evening or on weekends.
In short, at a time when traditional banking institutions are closed. Online credit also makes it easier to compete between the different offers, particularly thanks to the different comparative sites. Online credit therefore appears to be an efficiency factor, making it possible to obtain the best and most adapted offer. An ever changing evolution of online credit: the example of credit 2.0. Online credit is at the center of the evolution of telecommunications and undergoes changes through them. The latest example is social media with fintech and new financial companies, including Cedilikeme, a Mexican company. With catchy slogans (“if your friends trust you, too”) , they allow an individual to get support from his friends on Facebook to earn a credit.
How to get credit online?
Most major credit agencies present a similar procedure for obtaining credit online, often within days and without moving. There are three major stages: the request, the signature & the sending, the reception.
Step 1: Online Credit Application
Before you even ask for your loan, you have to think about how much you can borrow based on your income and needs, that is, your borrowing capacity. Most organizations, offering ways to subscribe to credit online, set up credit simulators. Roughly, they are calculators that indicate the amount that can be borrowed according to the income of the person who is the source of the demand (that is to say, the net taxable income), but also of his / her debt ratio which represents the amount repayments of all loans already subscribed. It is a guarantee of the financial health of the individual (NB: a good debt ratio is one that is less than 33%).
Once the desired amount has been defined, it is strongly recommended to simulate several credit scenarios online by modulating the duration of repayments. The principle is simple: the longer this period increases, the more the cost of monthly payments, and therefore of credit, also increases.
The duration must therefore be chosen according to the borrowing capacity previously defined keeping in mind that a too short duration, such as a too long duration, can paralyze, in the short or long term, all the financial capacity of the ‘borrower. This is why it must be carefully thought out thanks to the different simulators.
Simulation remains important for determining its borrowing capacity, but it is only effective if it is operated on several online credit sites.
Step 2: Accepting the preliminary offer – signing and sending documents
At the stage of accepting the online credit proposal, two cases must be distinguished according to the amount borrowed. In fact, for the small amounts, no guarantee is necessary, that is why it is enough to indicate its acceptance to the lender organization which will send in return a loan contract to sign and to return by postal way, or even by electronic way in some cases.
Several documents are typically requested from the borrower at this stage: a RIB, the last three payslips or the last sheet of taxation, the photocopy of the identity card, an invoice in case of assigned credit, …
However, for higher amounts, it is often necessary to move to the place of the borrowing agency; especially for a mortgage where a deposit, or even a mortgage, is necessary. Online credit, in this type of case, is then simply limited to the request for prior offer. However, it remains a useful way to detect the organization offering the most interesting offer and remains, as such, a tool for speed.
Step 3: Receiving funds
The immediate acceptance of an offer of online credit for consumption is possible but in the case of mortgages, it must be sent by mail or other durable medium, in accordance with Article L313-24 of the Consumer Code .
Since 2015, and the entry into force of the Macron law, the delay of repentance makes it possible to return to its credit commitment online under 14 days in case of consumer credit.
This period begins the day after the signature of the offer and is extended until the next business day if the fourteenth day is a Saturday, a Sunday or a holiday. The formality is simple: just use the withdrawal form attached to the contract.
Beware, this period of 14 days is valid only in case of consumer credit, ie a credit that relates to transactions other than those related to real estate and to buy consumer goods, for an amount between 200 and 75000 € with a repayment period greater than 3 months.
Online credit: good or bad innovation?
The emergence and expansion of online credit follows a global movement of order and online management of goods and services, all enabled through further development and wider access to telecommunication innovations. The adaptation of the loan contract to the digital age brings significant benefits:
- Speed, flexibility and comfort :
- The request and / or the subscription on-line exempts a passage in agency and thus the making of an appointment. Although a home loan requires the meeting of an advisor for the conclusion of the contract, the preliminary steps – often long and tedious – can be done on the Internet.
- An online credit application can usually be made at any time of the day and week.
- Similarly, the communication of supporting documents is done directly by electronic means.
- The response of lenders is given in a shorter period of time than in the case of a standard procedure (usually between 24 and 48 hours).
- Simplicity and ease :
- Subscribing to an online credit is a simple process since the potential borrower is guided from the first to the last step via intuitive platforms with just a few clicks.
- The communication is done by telephone, email, internet chat, videoconference, …, which allows to easily have answers to his questions.
- The management of an online credit can be done directly on the Internet via his personal space. This allows easy access to its schedule and track its credit at any time. Changes can even be made online.
- Financial economy:
- Fees are mostly lower and many institutions do not charge a fee for certain types of credit online. In addition, tariff promotions are offered on a regular basis by online banks.
- Thanks to the speed and accessibility of the application procedures, it is easy to find the most advantageous offer by comparing the offers. Comparative sites specialized in online credit exist to facilitate the task of individuals. This is a major advantage of online credit since the applicant’s personal bank often does not offer the best offer in the market.
- Adjustment : Online, it is easy to tailor your needs and make multiple requests for free and without commitment depending on your projects and resources. Online credit applications are the subject of a personalized study to benefit from the best conditions for each. This allows you to react quickly if you have to revise your projects down or, on the contrary, borrow a bit more than you expect.
- Forecast: The rates and ancillary costs are known at the beginning, from the request of credit on line, and make it possible to subscribe without unpleasant surprises.
However, a loan agreement remains a major commitment; the underwriting facility can sometimes be a danger. This is why we must remain vigilant on several points: