Today, it is possible for any individual to subscribe a credit for each of his projects. Whether it is the acquisition of a property, the purchase of a car or the financing of studies, it is always possible to find a financing adapted to its needs. However, obtaining credit is usually conditioned by the provision of a number of supporting documents. Nevertheless, the current trend suggests more and more financial organizations that specialize in granting the loan without proof. What exactly does the credit imply without justification? Is it an advantageous option? Who is this type of financing for? How can we get it? Find in this guide the answers to various questions about credit without proof.
Focus on the universe of credits without proof
Loan without proof is a loan that ranks among consumer loans. In practice, consumer credit includes both restricted and unrestricted loans. It is these unallocated loans that are still called unsupported credits. This loan category has some peculiarities that must be understood before subscribing.
What is a loan without proof?
The loan without proof is strictly the opposite of the loan affected. In short, it is not granted according to a specific project. The borrower has the opportunity to use the funding received as he wishes. Better still, it does not have to justify to the lender the allocation of funds.
In a simple way, a credit organization provides funding to an individual without asking what it will do for them. Unlike the home loan or car loan with which the borrower must use the funds for the realization of a clearly defined project, the money obtained with a credit without justification is used freely. As with other consumer loans, the repayment of the assigned credit is made periodically according to a frequency defined in the loan agreement. It is also framed by numerous legal provisions in order to protect the contracting parties.
In general, the law requires lending institutions to check the credit worthiness of the credit applicant before granting it. You should therefore be wary of credit institutions that offer offers that do not require, for example, proof of your identity or place of residence. For a credit without proof, you can ask for a sum between 200 and 75 000 USD. The repayment period varies from a few months to several years. In some cases, the duration of this credit can reach 10 years or more.
In addition, the financial institution has an obligation to inform its customers. This is why all communication media for this type of loan must be marked ” A credit commits you and must be repaid. Check your repayment capacity before you commit. “. In addition, there are different types of credits without supporting documents. The lender will therefore have to provide you with all the information relating to its offer so that you can make a wise choice.
The different types of credit without proof
By definition, the unsupported credit is a consumer loan that is not tied to any specific purchase. There are two broad categories of credit that correspond to this description:
- The personal loan;
- The revolving credit.
The personal loan is a type of credit that allows the borrower to finance his projects fairly freely. It does not need to have a personal contribution to obtain it. It is according to its financial situation that the lender defines the other terms of the credit. These conditions are fixed and known even before the signing of the loan agreement. It is this “stable” side of the personal loan that is lacking in revolving credit. The latter does not also require a justification for the use of the funds granted. However, its repayment term is not clearly defined at the time of loan subscription because of its characteristics. We will come back in detail on each of these credits without justification to better understand them.
Advantages and disadvantages of the loan without proof of use
The main advantage of this type of credit is the possibility of obtaining financing without having to justify its use. In this case, the credit institution can not demand a minimum contribution from the borrower since it does not know the destination of the funds. The privacy of the subscriber is respected. With the money obtained, the borrower can finance several projects simultaneously without applying for a loan for each of them. Moreover, to obtain this financing, you do not have to pay your salary or open an account at the lending institution. Better yet, the flexibility of the loan without proof is unparalleled. Thanks to the online simulations, the loan applicant can determine in advance the repayment terms of the loan. These are:
- The amount ;
- The date of sampling;
- The repayment frequency.
Nevertheless, there are also some disadvantages for this type of credit. First, it should be noted that it is more expensive than the credit allocated. This cost is justified by the fact that the credit institution takes more risks by granting a financing of which it does not know the affectation. In the case of an affected loan for example, the lender can easily seize the purchased property in case of difficulty of repayment. Since the latter does not have a guarantee related to a specific purchase for the loan without proof, its terms of acceptance are generally stricter than those of the affected loan. In addition, the borrower is much less protected with a credit without proof than with an assigned loan. In fact, the assigned loan is automatically canceled if, for one reason or another, the financed property is not delivered or if it presents any problem. The loan without proof of use does not benefit from such a guarantee since under the same conditions, the borrower will still have to repay his lender.
How can I get credit without proof?
There is nothing complicated when you want to subscribe to a consumer credit without proof . You can contact your bank or a specialized institution of your choice. Many financial institutions abound in the credit market. They do not hesitate to offer offers as enticing as each other to attract as many customers as possible. This permanent competition benefits the borrower since he will be able to obtain the best rates on the market.
However, we advise you to simply use the internet to find your credit without proof. Indeed, there are a multitude of websites specialized in credit from which you can submit your application online. Subscribing a credit via this channel is accompanied by many advantages. We can quote:
- The speed and simplicity of processing online credit applications;
- The ability to use an online simulator to view your credit;
- The exemption or the smallness of the expenses of file;
- The ability to tailor your application to suit your financial situation;
- The convenience of online credit underwriting (you can send multiple applications at different locations at once);
- The ability to apply online 24/7
- The reduced cost of online credit offers compared to the cost of offers from traditional banks (promotional offers are growing on the internet);
- The ability to use an online credit comparison tool to find the offer that best suits your financial situation and your needs …
After selecting the best deals, you can send your request in a few clicks to the credit agencies. Generally, a response in principle will be given within 10 minutes. For a positive opinion, you will receive a loan agreement that must be completed, dated, signed and returned to the lender. You must send it with the supporting documents requested (generally, these are documents to prove your marital status and your creditworthiness). The credit agency will then make a thorough study of your application to decide whether to grant you credit or not. It is after this study that you will receive the definitive answer. If it is positive, the funds will be quickly placed on your account.
Documents to gather to apply for credit without proof
The composition of your credit application file determines its acceptance. It is therefore important to provide the lending agency with all the documents it claims. By doing so, you increase your chances of getting the credit you want more quickly. Obviously, the more proof of income and good management of your account, the more convincing you are in the eyes of the lending institution. In practice, here is a list of documents that you may need to provide for a loan application without proof of purchase:
- A photocopy of your valid ID (this may be the national identity card, passport, residence card or resident card);
- A proof of address (generally, it is a bill of water, electricity or gas, a rent receipt, a property tax …);
- One or more proof of income (recent pay slips, the latest tax notice, a certificate of family benefits …);
- A bank or postal identity card.
This list is not exhaustive especially as the credit institution is free to ask you for more supporting documents. This is often the case if the profile of the credit applicant is less convincing at first glance. As an example, the lender may ask you to provide your latest bank statements or amortization tables for any outstanding credits.
Overview of conditions for accepting a loan application without proof of use
Above all, it is the subscriber’s credibility as to the repayment of monthly payments that conditions the lender’s decision whether or not to grant a loan. You must therefore submit to the credit agency a quality financial file, a file that proves that you have good capacity to repay the credit. But before, you must be a person of full age, reside on the French territory and enjoy all your mental faculties.
The main condition for accepting a credit application is usually the stability of the subscriber’s employment. Here are some profiles that can easily contract a consumer credit without proof:
- A permanent worker with several years of experience;
- A public service worker;
- A manager of a company with good returns …
However, it is not only the employees who are entitled to the credit. If you are not (liberal or acting, for example), you will have to present the lender with sufficient and regular cash inflows to convince him to give you a loan. For example, if you are a good saver, you will score points. In addition, you must have sound financial behavior. In other words, the lender must be able to verify that you are not used to big expenses or bank discoveries. He will ask for your recent bank statements to make sure. In the event that your recent bank statements show major expenses or large bank overdrafts, it is advisable to wait a bit to apply for credit. Thus, you will be able to present to the credit organization 3 bank statements that inspire confidence.
Another condition is the accumulation of debts. Lending agencies are often reluctant to give new credit to someone who already has several outstanding loans. If, however, your resources are high enough to cover all your loans so that you still have enough to manage your other monthly expenses, the lender will not hesitate to give you credit. In practice, your debt capacity should not be below 33%. However, if you have good savings capacity, it is possible that the bar is raised to 50% or more.
In addition, it should not be a banking prohibition or appear on the Personal Credit Reimbursement Incident File (FICP). Lending organizations are less enthusiastic about lending money for this type of profile. Indeed, there are other more suitable solutions for people in debt distress.
Good to know: if you are denied by more than one financial institution, you may want to know why you are refusing. It is possible to ask the credit institution for your credit rating, but know that the credit institution is under no obligation to give reasons. If you do not receive an answer after two months, you can seize the National Commission for Informatics and Liberties (CNIL). She can take care of your situation of refusal of credit.
Personal loan: the most unsubscribed credit in France
According to official statistics, the personal loan is the consumer credit most contracted in France. The enthusiasm expressed for this loan is explained by its very attractive characteristics. It is indeed easy to subscribe, which represents a real benefit for those who need immediate cash flow.
Distinctive features of the personal loan without proof
The personal loan without proof being from the family of consumer loans, it is capped at 75 000 USD. However, the amounts granted by credit institutions are generally below 21,500 USD. The credit rate can vary from one organization to another. Nevertheless, it remains higher than that of the affected loan. The mode, duration and repayment criteria of this loan are also variable depending on the lending institution. The same is true for the loan acceptance conditions. Indeed, it is possible that a profile refused in one credit institution is accepted in another. As with consumer loans, the borrower who subscribes to a personal loan without proof has a withdrawal period of 14 calendar days. During this period, which begins on the day the contract is signed, the borrower may decide to cancel the credit for one reason or another. However, he is not required to justify himself to the lender for this decision.
In practice, all the terms of the personal loan are known before it is obtained. It is a depreciable credit, that is, it is payable in several installments until a pre-established maturity. You must ensure that you know the following information before signing the loan agreement:
- The annual percentage rate of charge (APR);
- The amount of monthly payments;
- Costs related to the execution of the loan agreement;
- The total cost of credit;
- The number and frequency of deadlines …
Depending on your purchasing power, you can review the amount of the monthly payments of this credit up or down. In fact, it is possible to make an early repayment with or without payment of compensation depending on the amount repaid and negotiations with the lender. You can also review the amount of monthly payments down by requesting a rescheduling of the loan from the credit agency. Be aware however that with this last maneuver the credit will return to you more expensive. In any case, once you start using your loan, you must repay it.
What are the uses of this type of credit without proof?
The personal loan is above all a credit without justification. Thus the subscriber is not required to prove the use he makes of the money made available to him. He can use the funds to improve his daily life or to solve an unforeseen event. Here are some common uses of personal loans without proof:
- The acquisition of a piece of equipment, a car or a motorcycle;
- The completion of renovation or development work in your house or apartment;
- Financing a family event such as a wedding, birthday or death;
- The assumption of a need in cash (payment of taxes or unforeseen medical expenses for example) …
Precautions to take before applying for a personal loan
The personal loan like other types of loans has a cost and must be repaid. This reimbursement must be made without payment impact as far as possible. This is why we must take all possible precautions before subscribing this credit. It is important to think carefully about the usefulness of the project or purchase that you want to finance. You do not have to make a slight commitment because the lender does not make any verification as to the allocation of the funds it gives you. In addition, it is advisable to calculate your borrowing capacity before subscribing a credit without proof. From this indicator, you will be able to know if your financial resources are sufficient to enable you to pay the monthly installments of the requested loan.
In addition, it is not advisable to cheat with your income and your expenses when calculating your credit. It will also be irresponsible to provide false information in your loan application. The lender will not be liable if you end up in the abyss of over-indebtedness. Better, you will be considered a bad faith borrower. Thus, when you have difficulty repaying the credit, you will not be able to benefit from the procedure provided in case of over-indebtedness.
In addition, you need to make personal loan simulations online to determine the ideal features for your loan. It will also be necessary to make an online comparison to find the best offers on the market that match the desired credit. To help you in this process, we offer on our site Rate.com an online credit comparator. It is easy to use, free and without commitment. With this comparator, a few clicks are enough to locate offers with the best rates on the market. All you have to do is contact the credit agencies that offer them to submit your request. Warning ! After obtaining the preliminary offers of credit proposed by these organizations, you must only commit to one, the one whose conditions are better.
The revolving loan: a loan to be used with great precaution
Revolving credit is the second type of loan without proof except personal loan. It is very popular with consumers since it is easy to subscribe. However, before signing a revolving credit, you have to think twice. Indeed, poor management of this credit can easily lead to a situation of over-indebtedness.
Operation of revolving credit without proof
Also called revolving credit, the permanent credit is a permanent credit which consists in making available to the borrower a sum of money that he can use as he sees fit. This financing granted to the borrower is often referred to as the “money reserve”. The peculiarity of this reserve of money resides in the fact that it is reconstitutable. Concretely, it is renewed as the borrower repays his credit. Thus, the latter can reuse the reserve as many times as possible within the limits of available capital. For his expenses, he may use all or part of the reserve of money at his disposal. In any case, he will reimburse only the amount he has used in the reserve in addition to the interest that it would have generated.
Regarding the interests of revolving credit, they are not the least. In reality, the rate of this loan without proof is very high (it is generally between 10 and 20%) since it is close to the rate of wear. That is why it is advisable to subscribe this credit only for small amounts repayable over short periods. The APR of this loan is recalculated annually and the creditworthiness of the borrower is also verified at this frequency. The documents requested by the credit institutions for this loan are identical to those requested for all credits without proof.
The amount of the reserve can also range between 200 and 75 000 USD in accordance with the provisions of consumer credit. This amount depends on the lender’s income and repayment capacity. As for the maximum duration of the credit, it is regulated at 3 years for cash reserves of less than 3,000 USD. However, it is 5 years for cash reserves that exceed this amount. The duration of the loan is not only a function of the amount, but also of the borrower’s financial situation. If the latter owns property, for example, the credit agency will be inclined to extend the term of the loan.
Some specific characteristics of revolving credit
In the past, the revolving credit is continually renewed at each maturity without consulting the borrower. But since the introduction of the Chatel law of 28 January 2005, the renewal of the contract must first be confirmed by the borrower. Indeed, the credit institution has the obligation to send him a renewal offer three months before the maturity of the credit reserve. The latter will then have 20 days before the due date to accept or reject the offer. Through this same law, the consumer can request a reduction of the reserve, the removal of its use or even the termination of the contract at any time.
The revolving loan can be granted in the form of a line of credit. In this case, the borrower can draw money from the bank by bank transfer or check. However, this type of loan can also be associated with a specific card given to the borrower at the signing of the contract. It can be a private card, a card of purchase accepted in the majority of the signs or a card functioning like a bank card. It is the Hamon law defining the 2014 reform of the code of consumption which frames this financial device. The type of card granted generally depends on the lender. Establishments that provide a reserve of money are however legion. You can in fact take out a revolving credit without proof from the following structures:
- The banks ;
- Specialized credit organizations;
- The shops and major retailers …
However, one must pay attention to credit cards often obtained in stores and other similar sales structures. The consumer is often unaware that he is taking out a revolving credit by obtaining a loyalty card that allows him to pay in installments for a given product. Generally, the fault comes from the seller who does not explain very clearly to the customers, what they engage in accepting the card he offers them. We must remain vigilant not to subscribe a revolving credit without really wanting.
On the same subject
To help you better understand the context of credit without proof, we offer you further information on the subject below. Indeed, some confusion exists around the loan without justification that must be clarified to know what to do.
Confusion to avoid with the credit without justification
The term “unsupported credit” can sometimes be misleading. When talking about this type of credit, it implies a consumer credit without proof of use. Thus, it is not a credit without a proof of income as many people wrongly think. Note that it is difficult to find an institution that agrees to grant credit without claiming documents that justify the borrower’s income. Admittedly, such offers exist, but they generally concern only very small amounts of money. In addition, these credits are granted with a very high rate since the risk of non-repayment of credit is also great.
Can a loan between individuals be considered as a loan without proof?
Loan between individuals is a financing received by a borrower from another individual. It can be a parent, a friend or any other person. This loan is often granted against a debt recognition. However, it does imply certain obligations with regard to the interest rate and the administrative formalities. Nevertheless, the level of affinity between the two contractors can sometimes take over. Indeed, this loan can be for example granted without interest. In addition, the lender may not require the borrower to provide evidence of the destination of the funds. In this case, the loan between individuals can coincide with the credit without justification.