Revolving or depreciable: consumer choice

New provisions in the reform of consumer credit are already planned: they aim to promote the credit redeemable at the expense of revolving credit more expensive and complex for the consumer borrower. Upon entry into force of new orders, it will be the loan amount, and he alone, that will fix the wear rate loans, that is to say, the maximum interest rate applicable by banks for each category of loans. Should be created three new categories:

• loans of less than or equal to 3,000 euros;
• Loans in excess of 3,000 euros and less than or equal to 6,000 euros;
• Loans in excess of 6,000 euros.

Therefore, the wear rate should be identical for installment loans like revolving loans.

In addition, to facilitate the choice of credit depreciable rather than revolving credit, the lender will now have the obligation to offer two options of borrowing to its customers, provided that the borrowed amount exceeds € 1,000.

The repayment period should also be regulated according to these new categories of loans: a new decree provides that "a stock of less than 3,000 euros on a revolving credit must necessarily be repaid within 36 months and within 60 months outstanding for more than 3000 euros. " This is to reduce the duration of the consumer debt and reduce the risk of debt distress.

The reform of consumer credit has a total of 14 orders and four arrested, all of which will come into force on 1 May 2011. But a transitional period of two years is provided for a gradual implementation of this reform, in order to facilitate the adaptation of market participants. For consumers who want to get rid of credit deemed too expensive, there is always the possibility of considering the purchase of credits: the restructuring exercise will enable them to reduce the amount of their monthly payment, to gain more flexibility in their budget, while allowing them to liquidate their revolving credit.