The credit system works as follows: a financial institution lends you a sum of money (the capital) which you will then pay back with interest.
A credit agency is a commercial enterprise that lends you money it buys on the financial markets. To cover its costs, the financial institution is remunerated by applying an interest rate on the amount of ready. Generally this translates into a periodic payment from the borrower to the lender.
The activity of a financial institution
The main activity of a credit agency is to lend sums of money to individuals who undertake to repay them most often in the form of monthly installments. Each monthly payment consists of a fraction of the amount borrowed, interest calculated and optional insurance premium, if any.
Fixed and variable costs
When an organization gives you credit, it calculates interests on the amount borrowed. This is the interest rate . In the case of a depreciable loan, this rate is generally fixed and allows you to anticipate the exact amount of additional fees you will pay at each maturity upon signing your credit agreement . This is called the Fixed Annual Total Effective Rate (APR). In the case of a revolving credit, the APR is reviewable and may change depending on the life of the contract. The customer is then informed upstream of this rate change.
In some cases, the APR may be variable and will fluctuate based on an index defined and explained at the time of signing the contract.
Negotiating an interest loan
All borrowing can be negotiated between a financial institution and you. Our Pre-finance advisors are at your disposal to discuss with you in all transparency the terms of your contract (interest, amount and duration of the credit granted).