You need to take out a bank loan but are not sure you meet the conditions required by the banks. Indeed, to give their loan approval, banking establishments carry out a customer risk analysis. Each establishment determines its own conditions of acceptance but it is still possible to identify the most recurring criteria.
Factors taken into account by credit institutions:
1 – Fixed and regular income
To obtain a loan, you must be able to present fixed and regular income. Stability is an essential criterion for banks. A permanent contract or a job in the public sector are assets. For the self-employed, business leaders and liberal professions, seniority will be taken into account. Fixed-term contracts, temporary contracts or internships are generally not taken into consideration.
2 – A low debt rate
The debt ratio is the ratio between the household’s net income and the total monthly loan payments. It is calculated as follows: Debt rate = (Total monthly payments France, credit institutions consider the maximum debt rate to be 33% . In this example, the total monthly loan payments must therefore not exceed €500/month. Sometimes, the debt rate granted can be higher than 35%, it all depends on the remaining life.
3 – Sufficient remaining time to live
The remainder to live represents what a household has left each month, fixed charges and monthly credit payments deducted (bills, taxes, transport, etc.). Each bank can apply its own recipe. However, we can start from the following calculation method Remaining to live = total resources (salaries, pensions, 70% of property income) – total fixed costs (rent, taxes, alimony) – total credits. The remainder of your life is closely watched by credit organizations. To give an idea, the minimum remaining living requirement for a single person is €750, €900 for a couple without children to which is added €150 per child.
4 – Age
It is now possible to borrow beyond the age of 65 but the conditions are draconian. The cost of insurance is then very high, and sometimes results in exceeding the current usury rate, resulting in the refusal of bank financing. Likewise, before the age of 25, it is very complicated to obtain credit, even for consumer credit.
5 – Personal contribution
Personal contribution is not an essential factor to obtain a loan although a 10% contribution is often requested in the case of a real estate loan. The greater the remainder to live on, the more likely banks are to grant a loan without down payment.
6 – A healthy financial situation
Banks do not grant credit to the people on file. They systematically question the Banque de France to ensure that no registration is in progress. There are several types of registration: The FICP: national file of incidents of reimbursement of loans to individuals The FCC: central check file Registration in a Bank of France file, whatever the nature of the banking ban, is the main reason for bank financing refusals.
How to obtain financing?
First, contact several banks and compare offers or contact a credit broker who will submit the best proposal to you after questioning its banking partners.
It is possible to find financing without going through a bank. Today, there are several alternative solutions to the traditional banking circuit: lending between individuals, for example, regulated by law, can be an option.
It is also possible to opt for participatory financing via different crowdfunding platforms which today make it possible to propose any type of project.