Revolving Credit or Revolving Credit

Revolving credit is a credit opening that allows you to dispose of the amount of the loan in installments, and on dates of your choice.

It is a consumer credit with or without a card.

If the revolving credit is accompanied by a card, this card must bear the words on the back, in legible characters credit card, and you must receive it at the same time as the credit agreement.

Revolving credit is also called revolving credit, standing appropriation, reserve of money, or replenishable creditHowever, the law requires credit institutions to use the term "revolving credit" in commercial or advertising materials.

You can take out a consumer credit from a credit institution, a financing business or their intermediaries (merchant, retail chain, mail order, broker, etc.).

Advertising on credit and revolving credit is regulated by law.

A credit institution that advertises a consumer loan must include the words "A credit commits you and must be repaid. Check your repayment capabilities before committing."

Where the advertisement for a revolving credit indicates an interest rate or numerical information related to the cost of the credit, the credit institution shall present an example showing the following information:

• Debit rate, and precision on fixed, variable or revisable nature (except for hire purchase or hire purchase transactions)
• Information about all charges included in the total cost of the credit
• Total credit amount
• Annual percentage rate of charge (except for hire purchase or hire purchase transactions)
• Duration of the credit agreement
• The spot price and the amount of the advance payment, if it is a credit granted in the form of a payment period for a given good or service
• Total amount due by the borrower and maturity amount
• Clear, precise and visible indication of an ancillary service required by the financial institution for the granting of the credit (e.g. insurance).

The credit institution shall submit one or more simulations so that the representative example best corresponds to the credits it advertises.

The representative example shall present a simulation with figures for €500, one for €1,000 and one for €3,000.

The example shall also show the maximum period of reimbursement provided for in the commercial offer to which the advertisement relates.

Where the advertisement mentions a promotional interest rate or exceptional terms and conditions for the use of the revolving credit, the representative example shall set out the normal conditions for the execution of the credit agreement.

The representative example shall also indicate, in a character size larger than that used for the remainder of the advertisement, the following information:

• Clarification that this is an example
• Indication of the number of maturities for each maturity of the same amount.

If the credit institution offers or charges you insurance that guarantees repayment of the loan, it must provide you with detailed information on the cost of this insurance.

The detailed information shall include a quantified example showing the cost of insurance as follows:

• Annual effective rate of insurance, allowing easy comparison with the annual effective rate of credit
• Total amount due for insurance over the total duration of the loan, expressed in euro
• Amount due for the insurance per month, expressed in euro (whether or not this amount is added to the repayment maturity of the credit).

The representative example should also specify that the maturity amount is given "excluding optional insurance".

Advertising that presents the card benefits associated with a revolving credit must specify that the card can be used to pay cash or credit.

The credit institution or its intermediary must inform you of the terms of use of the revolving credit.

Where a payment card is associated with a deposit account and a revolving credit, or with a payment account and a revolving credit, the advertising for the card shall set out the terms of use of the credit.

Where advertising for a revolving credit is in writing, the following information shall be presented in a larger size than that used for the rest of the text:

• Information on the annual percentage rate of charge and its fixed, variable or revisable nature
• Information on the total amount due by the borrower and the amount of the maturities
• A statement to the borrower that a loan commits the borrower, that the borrower must repay the loan, and that the borrower must check its ability to repay before making the loan commitment.

No advertisement for a revolving credit shall contain any of the following statements:

• The loan may be granted without information enabling the financial situation of the borrower to be assessed
• The loan improves the borrower's financial situation or budget
• The loan increases the borrower's resources
• The loan is a savings substitute
• The loan grants an automatic reserve of money immediately available without identifiable financial consideration
• The loan shall be subject to a period of non-repayment of maturities of more than 3.

The credit institution advertising a revolving credit shall not be entitled to offer promotional packages conditional on the acceptance of a prior offer of credit.

The procedure for granting revolving credit must begin with an interview during which the financial institution or intermediary must give you information and explanations on the loan and verify your creditworthiness.

Revolving credit must be granted by a contract drawn up on paper or on another durable medium.

A credit union that agrees to grant you a revolving credit must send you a contract offer, which you must sign and return.

The credit institution can provide you with a copy of the contract offer at your request together with the pre-contractual information sheet, if he wants to grant you the credit.

The credit institution can also send you the contract offer after your credit rating has been reviewed.

The transmission of the contract offer is free of charge and must be done in person or by post.

The contract offer must be written on paper or in another durable medium.

It is a document that should not be confused with advertising materials and the pre-contractual information sheet.

The contract offer must contain all the terms of the revolving credit, with a box inserted at the beginning of the document which sets out its essential characteristics.

If the revolving credit is offered to you by a professional, in a store or remotely, to finance a purchase of more than €1,000, the proposal for a revolving credit shall be accompanied by a proposal for depreciable credit.

The overall proposal should include information that allows you to clearly compare the operation, cost, and amortization terms of the two types of credit, based on at least 2 repayment term assumptions.

If you choose to use depreciable credit, the trader must provide you with the proposal's depreciable credit agreement offer.

If you have a co-borrower or credit bond, the credit institution shall also provide them with a copy of the offer of the credit agreement.

The bank has the obligation to guarantee the conditions contained in the offer for a period of 15 free days from his delivery.

To accept the contract offer, you must date it, sign it, and return it to the credit union or intermediary.

The loan contract offer must be written in characters of at least size 8.

It shall contain the following information in detail:

1. Identity and address of the creditor, the borrower and, if necessary, the credit intermediary
2. Box showing in large print the essential elements of the contract, namely:
   
   • Type of credit (earmarked credit, staff, renewable...)
   • Total amount of credit and conditions for making funds available
   • Duration of the credit agreement
   • Amount, number and frequency of maturities to be paid by the borrower
   • Borrowing rate and conditions applicable to that rate
   • Annual effective rate overalland the total amount due from the borrower, calculated at the time of the conclusion of the credit agreement
   • All charges related to the execution of the credit agreement
   • Collateral and insurance required, if necessary
   • Amount of notary fees, if necessary
   • If the credit is used to finance the purchase of a good or service, the description of the good or service and the cash price of the good or service.
3. Repayment Terms
4. Identity and address of possible guarantees
5. Conditions for acceptance or withdrawal of the credit agreement, namely:
   
   • Information on the conditions for concluding the contract
   • Reference to the existence of the right of withdrawal, the time limit and the conditions for exercising this right
   • Reference to the prohibition of payments and deposits between the creditor and the borrower for a period of 7 days from the acceptance of the contract by the borrower
   • In the case of an earmarked credit, the rights of the borrower and the conditions for exercising them.
6. Information relating to the performance of the contract, including the following:
   
   • Conditions for early repayment, conditions and method of calculation of the early repayment allowance
   • Conditions for termination of the contract by the borrower
   • Reminder of the consequences of a borrower default
   • Indication of the compensation due in the event of late payment and the non-performance fees charged in the event of default, and the conditions for adjusting and calculating such compensation and fees
   • Reference to the borrower's right to receive a statement in the form of a depreciation table, at his request and free of charge, at any time throughout the term of the contract (except for hire purchase and hire purchase).
7. Dispute handling information, including:
   
   • Presentation of the mediation procedure and its conditions of practice
   • Reference to the court competent for actions for payment against the defaulting borrower and the limitation period for such action
   • Indication of the contact details of the Supervisory Authority and the DGCCRFDGCCRF : Directorate-General for Competition, Consumer Affairs and Fraud Prevention.

The credit agreement shall also contain the following particulars:

• Each monthly payment includes a minimum repayment of the principal borrowed, the amount of which varies according to the total amount of the loan.
• The amount of a monthly payment must be at least €15, except for the repayment of the outstanding balance, which may be less than 15. €
• The duration of the contract is limited to one year, renewable, and the borrower must be informed 3 months before the expiry of the conditions for renewal of the contract.
• When the borrower requests that he no longer receive the credit, the balance due must be repaid by installment, unless the debtor wishes to repay in cash.
• The borrowing rate referred to in the contract is a revisable rate; it will be adjusted according to the changes in the basic rate which the credit institution applies to revolving credit operations or according to the rate shown in the scales which the credit institution disseminates to the public.
• The borrower must be notified in advance of the revision of the borrowing rate by means of a letter in paper form or in another durable medium, and must be given a period of 30 minutes working days to accept or reject the change.

If the credit institution proposes variable maturities, the credit agreement must provide for a minimum repayment amount of 1% capital for loans of an amount less than or equal to €3,000 and 0.5% capital for loans over €3,000.

In this case, the contract must also provide that the repayment period of the credit may not exceed 36 months for credits whose amount is less than or equal to €3,000, and 60 months for appropriations exceeding €3,000.

Where a card is associated with the contract, the words "credit card" shall be indicated in legible characters on the front of the card.

If the card is eligible for benefits, the credit institution shall indicate in the contract the possibility of using the card for cash or credit payments and the effects of the credit payment.

If the offer of a credit agreement is accompanied by an insurance proposal, the credit institution must provide you with an insurance notice.

The package leaflet must be printed on paper or in another durable medium.

It must contain extracts from the general terms and conditions of the insurance, in particular the identity and contact details of the insurer, the duration of the contract, the risks covered and the risks not covered.

If the credit institution requires you to take out insurance to obtain the credit, it must indicate in the offer of the credit agreement that you have the possibility of taking out insurance with another insurer equivalent to the one it offers you.

If insurance is optional, the credit agreement offer must specify the procedure to be followed in order not to take out the insurance.

The credit agreement cannot apply immediately after you sign it, because there is a mandatory withdrawal period that is imposed on you and the credit institution.

The withdrawal period is a period during which you have the right to waive the credit without having to justify yourself to the credit institution.

The withdrawal period is 14 calendar days and the starting point for this period is the day on which you signed the credit agreement offer.

The credit institution must attach to the contract a detachable form to allow you to easily exercise your right of withdrawal.

If you waive the credit, this automatically results in the cancelation of contracts ancillary to the credit agreement, such as the insurance contract.

It is forbidden for the credit institution to record your details in a file following the exercise of your right of withdrawal.

During the withdrawal period, the credit institution or intermediary cannot claim any payment from you.

Once the withdrawal period is exceeded, you can no longer give up your acceptance of the offer of a credit agreement.

The credit institution must perform the contract, by making the funds available to you or by paying for the purchase of goods or the provision of services, at the time when the credit agreement is fully formed.

The consumer credit agreement becomes perfect when the following 2 conditions are met:

• You did not exercise your right of withdrawal within the deadline
• The credit institution has informed you of its agreement within 7 days calendar days after your acceptance.

If the credit institution has not sent you its agreement within the period of 7 working daysHowever, this means that your loan application has been refused.

But if you receive the agreement of the credit agency after the expiration of the 7 working days, you can benefit from the loan if you still want.

The credit institution's agreement to make the funds available to you after the expiry of the 7 working day period is also valid.

During the 7 working days following your signature of the credit agreement offer, the credit institution must not make any payments to you in connection with the loan transaction.

Likewise, the credit institution may not require any payment or deposit from you within this period.

But if you have purchased a earmarked credit (i.e. related to a specific purchase), and you make the request in writing, the seller may make the delivery of the good or the supply of service immediately or within a period shorter than 14 calendar days. We're talking about shortened period.

When the seller delivers the goods or the service within a short period of time, you can no longer exercise your right of withdrawal after the delivery or the service.

When the seller makes the delivery of the goods or the provision of services immediately, you can no longer exercise your right of withdrawal after the expiry of a period of 3 calendar days.

The credit institution may make the funds available to you after the expiry of the period of 7 working days following your signature of the credit agreement offer.

If you exercise your right of withdrawal after the funds have been made available, you must repay to the credit institution, at the latest within 30 days of sending your withdrawal.

In this case, you must also pay the accumulated interest on the funds paid to you, calculated from the date of receipt of the funds to the date of repayment.

You do not have to pay compensation in addition to interest to the credit institution.

The credit institution is required to send you an updated monthly statement of the performance of the revolving credit agreement.

Each updated report shall clearly refer to the previous report and shall specify, in legible characters and on the first page, the following:

• Statement cut-off date and payment date
• Fraction of available capital
• Share of unused capital (available)
• The amount of the maturity, specifying the interest portion
• Period rate and headline effective rate
• Cost of insurance, if included in the maturity amount
• Total amounts due
• Amount of repayments already made since the last renewal, with the share between the capital repayment and the interest and costs
• Reminder of the possibility to request at any time the reduction of the credit reserve, to suspend the use of the credit reserve or to terminate the contract
• Reminder of the possibility to pay at any time in cash all or part of the outstanding amount, without being limited to the amount of the last due date
• Estimate of the number of monthly installments outstanding to achieve full repayment of the amount borrowed.

Where the revolving credit is accompanied by a card giving rise to entitlement to benefits, the credit institution may not condition the entitlement to those benefits on payment on credit.

The lender or credit intermediary must give you the opportunity to benefit by paying cash with the card.

If a credit card issued by a credit institution has a deposit account and revolving credit, or a payment account and revolving credit, you must clearly mark your choice for the use of the credit.

This choice must be expressed by express agreement at the time of payment with the card or within a reasonable period of time, upon receipt of the updated monthly statement of the performance of the credit agreement.

When the credit institution plans to revise the borrowing rate, it must inform you of this by means of a letter written on paper or on another durable medium before the date of application of the new rate.

The credit union must give you a 30-day period working days after receiving the information to make a decision on the rate review.

If you wish to refuse the revision, you must send a written request to the credit institution.

In this case, the credit ends and you must repay the amounts already used on a staggered basis or under the applicable conditions before the attempt to change the rate.

The law requires credit institutions to be tolerant before initiating enforcement proceedings against a distressed borrower.

For example, in the event of payment difficulties, your credit institution should consider renegotiating the loan according to your personal situation, using one of the following measures:

• Total or partial refinancing of the credit agreement
• Extension of the duration of the credit agreement
• Total or partial suspension of monthly payments for a given period
• Change in interest rate
• Adjustment of the schedule (e.g. reduction of monthly payments)
• Partial debt relief and debt consolidation.

Starting on 1^er If you fail to pay, the financial institution has an obligation to inform you of the risks you incur if you fail to regularize the situation.

This information must be provided on paper or in another durable medium.

The financial institution may decide, despite your default, to temporarily pay the insurance contributions on your behalf, to allow you not to lose the benefit of the guarantees provided for in the contract.

If the credit institution has required you to take out insurance for the loan, and you have taken out this insurance with an external company, the insurer must inform the credit institution that your insurance premiums have not been paid.

When you default on the monthly installments, the credit institution has the right to demand the immediate repayment of the principal outstanding and interest overdue but not paid yet.

The principal amount outstanding shall earn interest for the credit institution at the rate of the loan between the date of the delay and the date of your payment.

If the credit is used to finance a lease agreement with a promise to sell or a lease-purchase agreement, the financial institution has the right to demand the return of the property and the payment of rent due but not yet paid.

In the 2 cases, the credit institution may also claim compensation from you to cover the damage caused by your default.

This allowance may not exceed 8% of the balance outstanding.

If the financial institution decides not to require immediate repayment of the outstanding principal, it may offer to renegotiate the loan according to your personal situation, through one of the following measures:

• Total or partial refinancing of the credit agreement
• Extension of the duration of the credit agreement
• Total or partial suspension of monthly payments for a given period
• Change in interest rate
• Adjustment of the schedule (e.g. reduction of monthly payments)
• Partial debt relief and debt consolidation.

The maximum number of maturity extensions is 2 per year.

When the credit union grants you a term extension, it must suspend the use of the credit until you have repaid all the terms that have been carried forward.

Carry-overs shall not give rise to charges other than interest and insurance contributions.

Deferral periods may result in exceeding the maximum repayment term of the revolving credit.

You have the right to prepay the revolving credit, if you wish.

The early repayment may relate to part or all of the outstanding amount.

If you make an early repayment, the credit institution must not count interest and fees that relate to the period for the early repayment.

When you prepay more than €10,000 during a 12-month period, the credit institution has the right to claim an early repayment allowance from you.

The amount of the early repayment allowance shall be capped according to the period between the early repayment date and the end date of the credit agreement.

If you make the early repayment less than 1 year before the end of the credit agreement, the early repayment allowance is limited to 0.5% the amount of the credit.

If you prepay more than 1 year before the end of the credit agreement, the prepayment allowance is limited to 1% the amount of the credit.

In any case, the amount of the early repayment indemnity shall not exceed the amount of interest due for the period between the early repayment date and the end date of the credit agreement.

Upon early repayment, the credit institution is not entitled to claim any other compensation or expenses other than the early repayment allowance.

The early repayment allowance does not apply in the following cases:

• The credit that gives rise to the early repayment is an overdraft authorization
• The early repayment was made in fulfillment of an insurance contract intended to guarantee the repayment of the credit
• Early repayment occurs in a period where the borrowing rate is not a fixed rate.

The consumer credit agreement should specify how you will proceed if you wish to prepay the credit, as well as how the prepayment allowance is calculated.

The law provides that the revolving credit agreement is concluded for a renewable period of 1 year.

If the credit institution intends to renew the contract, it must inform you of the renewal conditions 3 months before the annual deadline.

Before proposing the renewal of the contract, the credit institution must consult the credit incident file, and it must check your creditworthiness every 3 years as at the time of granting the credit.

After consulting the credit report or checking your creditworthiness, the credit institution may decide to reduce the total amount of the credit, suspend the right to use the credit or not propose to renew the contract.

If the credit union offers you to renew the contract, but with modifications, you can refuse the renewal if the proposed modifications do not suit you.

You have to do it by 20 calendar days before the new contract enters into force.

You must return to the credit union the rejection response slip that must be included in the renewal conditions information letter.

You will then have to repay the amount of the money already used.

If the credit union wants to renew the contract, but you have not used the credit for one year since the last renewal, it must attach a specific document to the renewal conditions.

This document shall contain the following elements:

• Identity of the parties
• Nature of the operation
• Amount of credit available
• Annual effective rate overall
• The amount of repayments by maturity and by fractions of credit used.

The credit union must suspend the use of the credit if you do not return the signed and dated document, at the latest 20 days before the maturity date of the credit agreement.

The suspension can be lifted at your request, and after a new credit check.

You must request the lifting of the suspension before the expiry of the one year period following the date of the suspension of the contract, otherwise the contract will be terminated automatically.

Where the contract is accompanied by a credit card, the deduction of the card fee shall not be considered as a use of the credit.

The credit institution may also decide at any time to reduce the amount of the credit or to suspend its use, if it has information that shows that your creditworthiness has decreased since the conclusion of the contract.

They must inform you in advance by means of a letter written on paper or in another durable medium.

The credit institution may reinstate the full amount of the credit or lift the suspension of its use after a new credit check.

During the credit suspension period, you must repay the amount of the credit already used.

You may also request at any time a reduction in the maximum amount of credit, suspension of the use of the credit, or termination of the contract. In this case, you must repay the amount of the credit already used.