In addition to consumer credit, there are other financing options for your personal projects.
What are the advantages and limitations to go through the LOA, the LLD, the repurchase of credit and the participative credit?
Finance your project with a Call Option Rental
The LOA (Rental with Purchase Option) is an alternative to the standard consumer credit for acquiring a vehicle: car, motorcycle, camper, etc.
The principle is as follows: a lending institution buys the vehicle to your account and leases it for a period specified in the contract, in exchange for the payment of a monthly installment. At the end of this period, you have the choice to finalize the purchase of the property, or not.
You are therefore the renter of the vehicle. The usual usage and maintenance costs are at your expense. Even if you do not own the vehicle, it’s also up to you to insure it. The lender can offer insurance, but can not impose it: the choice of the insurance contract is completely free.
The LOA is preferred if you do not want to keep the vehicle for a long time, for example if you want to be able to change vehicles regularly. In general, the duration of use of the vehicle provided for in the contract is between 2 and 6 years.
The LOA is also known as leasing, leasing, or lease with promise of sale.
Opt for a Long Term Rental
The LLD (Long Term Rental) works in the same way as the LOA, but without the possibility of purchase in fine.
Through a LLD, you can use a new vehicle, against the payment of monthly payments for 1 to 5 years. You have the possibility to opt for an all-inclusive contract (maintenance, various repairs, insurance, etc. ), or to take the service providers of your choice.
Although there is no intention to buy the vehicle at the end of the LLD contract, you can still make the proposal to the lender.
The vehicle is rented for a certain annual mileage. Beyond this threshold, the excess is billed.
Realize your projects with a purchase of credits
You would like to finance a project conso but you already have one or more credits in repayment? The redemption of credits can be the solution.
Its principle is to group your different loans (for consumption or not) into a single loan. All your debts are repurchased by a lending institution, against a single loan, with an interest rate and fixed deadlines.
The amount of your monthly payments may be lower than the sum of current maturities: your debt ratio decreases (1), which allows you to calmly consider financing your new project. For this, the lender plays on the repayment term of the new credit which is generally longer.
Why not consider a participatory credit?
Crowdfunding is also an option for financing a personal project. The crowdfunding is quite known for its applications in the field of professional projects, but can also concern individuals.
Indeed, online platforms exist to connect investors and individuals in need of credit. These investors may be professionals, or other individuals.
In return for your refund, with interest payments, multiple lenders financially contribute to your project at a certain height:
- It is possible to set an interest rate with each lender. This rate is fixed and can not exceed the rate of usury (ie the maximum rate set by the Banque de France).
- Each lender can only participate up to € 2,000 over a maximum of 7 years per project. This ceiling increases to € 5,000 if the loan is interest free.
In the case of gifts of money, we speak of “crowdgiving”, and in the case of the loan of a sum of money, we speak of “crowdlending”.
(1) The decrease in the amount of the monthly installments assumes an extension of the repayment term and an increase in the total cost of one or more loans subject to the combination.