Generally intended for the purchase of cars, household appliances, vacations, etc., consumer credit is governed by rules aimed at informing and protecting the individual.
Consumer credit: Consumer protection
The credits granted on a regular basis, whether free or not, automatically fall under legal protection:
- reimbursable in more than 3 months,
- and intended to finance private needs of an amount not exceeding $ 21,500.
Certain consumer loans that do not meet all of these criteria may, however, be subject to legal protection provisions.
Consumer credit: Prior loan offer
The consumer credit institution must submit a written contract proposal in duplicate to the borrower.
This document specifies:
- the identity of the parties and, where applicable, that of the sureties,
- the conditions of grant: amount of credit, nature, object and terms of the contract, total cost of credit, amount and number of monthly payments, TEG, etc.
Consumer credit: 15-day cooling-off period
The lending institution must maintain the conditions proposed in the loan offer for at least 15 days.
This period allows the borrower to study the terms of the contract.
Consumer credit: 7 day withdrawal period
Once the prior credit offer has been signed, the borrower can still retract for the following 7 days (3 days at his express request, for an affected credit with immediate delivery):
- if it retracts within the time limit, the credit is automatically resolved,
- after this period, the loan contract comes into effect.
The lender has the same period to refuse the credit (the sales contract linked to an affected loan is then canceled) or to accept it. Until the expiration of this period, no payment can be made.
Consumer credit: Early repayment
The borrower can always repay, in advance and without penalty, all or part of the credit.
The contract may however stipulate that any partial reimbursement less than 3 times the contractual amount of the first unmatured installment will be refused.
Consumer credit: Tax
“Student loan” tax credit:
- loans concerned: those subscribed from 01.09.2005 to 12.31.2008, by students aged 25 years or less enrolled in a higher education cycle,
- amount: 25% of the interest paid for the first 5 repayment installments, retained within the annual limit of $ 1,000,
- condition of attribution: from the year when the student constitutes a separate tax household.