The personal loan

This type of consumer credit is offered by banks or financial institutions (such as Paydaynow or Cofinoga, etc.).
Up to an amount of US $ 21,500 you benefit from laws for consumer protection (Scrivener Laws among others). It is of course possible to obtain higher amounts, but not with the same guarantees.

As opposed to assigned credit, taking out a personal loan is not tied to a particular purchase . In theory, then, you don't have to justify the use of the money.

However, banks and credit institutions often want to know the destination of the sums paid to you. To this end, and in a practical way, they present personal loans with unequivocal names: " car loan ", " work loan ", " work loan ", " all project loan ", "project loan" ...
These different loans, which are in fact all dressed personal loans , do not have the same pricing . We often notice that the car loan is cheaper than the work loan, itself cheaper than the cash loan ...
In fact, banks often ask for proof of purchase , a quote, the contact details of the seller or craftsman. By "justifying" your personal loan in this way, you can obtain a more advantageous rate ...

Your questions :

Why is a car loan cheaper than a loan for another asset?

  • firstly, because the risk that a bank takes to give you a loan is lower if you buy a car ... this is an observation but which we can compare with the fact that the French are very attached to their car.
  • second, the amounts of credit for the purchase of a vehicle are much higher than for a computer ... As you borrow more you can benefit from a better rate ... because the costs incurred for a small amount are almost identical to those for a large amount.

Do we have to say how we are going to use the money?
No, according to the law, nothing obliges you to do so ... But in this case, nothing obliges your banker to accept the credit either! In general, it always seems suspicious to your banker if you cannot tell him what a loan will be used for ...
If you really don't want to explain yourself, and for an amount between 4000 and 5000 us dollars, go for a revolving credit

Revolving credit

Banks, financial institutions or stores, all of them offer you revolving credits (old permanent accounts ).
You open a line of credit which corresponds to an overdraft authorization in which you can take financing up to the authorized sum .
These accounts are usually provided with a credit card allowing you to make purchases or withdraw cash from ATMs.
How revolving credit works .

A loan commits you and must be repaid.
Check your repayment capacity before you commit.

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