Principle and usefulness of the unsecured personal loan

Before borrowing unrestricted cash through a personal loan, it is recommended to take an interest in its principle, but also in its usefulness. Also find all the advantages and disadvantages related to this solution, which can guide you to know if it is adapted to your needs.

What is a personal loan?

The personal loan is an unallocated consumer credit offer that allows you to borrow an amount to freely pay for your one-off expenses for goods and services and finance all your projects . According to the Lagarde law, you can borrow up to 75,000 euros over a fixed period of up to 84 months , or 7 years (or more under certain conditions).

The personal loan is called “without justification” because it only requires providing the bank with a verbal description of the use you will make of the borrowed capital. It is you who decides when and for what purpose you will use the money paid into your account, after the release of the funds by the lender.

You can therefore apply for a personal loan without having to provide proof of project (quote, invoice, purchase order, etc.). It therefore offers more flexibility to finance your needs compared to an assigned consumer loan, the funds of which are reserved for the use stipulated in the contract.

What types of projects can be financed with an unsecured personal loan?

With a personal loan, you are able to use the borrowed money for any expenses you want, without having to justify them . It is therefore up to you to choose the purchases of goods and services and the life projects that you intend to afford, excluding real estate projects.

This loan is generally a suitable credit solution for those who plan to finance needs at several time intervals :

purchase capital goods (multimedia devices, household appliances, furniture and other consumer

The unsecured personal loan is a flexible offer , because you do not have to provide proof of project to obtain a financing agreement. The capital paid to you can be spent whenever you want.

It is also a versatile consumer credit without proof  : you can decide to borrow an amount for one or more projects in a single application and up to €75,000. All your needs are therefore covered by this offer.

If you have in mind to realize a project without being able to quantify the exact amount needed, such as a wedding or a trip for example, the personal loan is also the ideal solution. Indeed, it is not always possible to estimate your projects with quotes and anticipate unforeseen expenses.

Recognized as a fast credit solution , the time spent between your request on the online form and the release of funds can take only a few days. Without the obligation to present supporting documents for your projects, you will save considerable time during the preparation upstream of your request and during the feasibility study carried out by a lending institution.

In addition, since the personal loan is granted without proof, it is also more difficult to borrow a large amount , generally banks require proof of purchase in this case. Also, its repayment period is limited and rarely exceeds 5 or 7 years, while a consumer loan allocated to work can last up to 12 years.

The last drawback to consider is that personal loan rates can be higher than those of earmarked loans, which increases the cost of financing . It is therefore preferable to take out a car loan or a work loan to finance the purchase of a car or renovation work. To do this, simply bring a purchase order or a quote that will be added during the preparation of your file.

Steps and criteria for obtaining a personal loan

Like any bank financing, taking out a personal loan requires compliance with certain financial conditions. We list them for you, then give you our best advice to facilitate your steps in order to benefit from an attractive personal credit offer.

What are the conditions for accepting personal credit?

The main condition for banks to accept a personal loan is to have sufficient repayment capacity to pay the monthly installments without payment incident until the end of the contract. This will be assessed by various criteria relating to the borrower’s personal, professional and financial situation. The agreement for an unsecured personal loan requires:

No supporting documents are required for an unallocated personal loan application, so you will save considerable time by not having to go around professionals to issue quotes or purchase orders. A real breath of fresh air that will make your administrative procedures more flexible.