What is a depreciable personal loan, what are its advantages and disadvantages? Many borrowers hear about this concept of depreciable credit without really being aware of its characteristics. Everything you need to know about this type of consumer credit.
What is a depreciable personal loan?
The depreciable personal loan is a personal loan reimbursed at fixed dates, over a period established in advance. We talk about the notion of amortization to designate a constant reimbursement spread proportionally, with fixed monthly payments.
Indeed, an amortization schedule allows you to plan your repayments well. The borrower is thus in the best position to make his credit coexist with his current expenses. This does not prevent certain credit organizations from offering options allowing them to take a break in their repayments, repay in advance or even postpone certain monthly payments.
The rate of the depreciable personal loan is always a fixed APR rate *.
A classic loan without and simple to understand
The amortizable loan is the most commonly practiced and proposed in the medium of the consumer credit. He opposed the loan ultimately, more common in the real estate sector. This type of credit works differently, since only interest is paid back over the life of the loan. The capital is reimbursed only at the end (in fine) of the credit.
Credit ultimately imposes significant trust – and therefore guarantees – between the lender and the borrower. Rather, it concerns investors wishing to buy real estate intended for rental. The loan in fine is not offered by consumer credit specialists.
How are the monthly payments fixed?
In the case of a repayable loan, the first months of repayment include a larger percentage of the interest on the loan. The amount of the personal loan to be reimbursed is the same each month, but the share of interest, calculated on the basis of the capital remaining due, decreases progressively. Once interest is amortized.
The importance of comparing rates
Our amortizable personal loan comparator is rather unique in this area. It provides:
- A classification based only on the best APR rates
- An immediate policy response from each of the top three organizations
* Understand everything about the annual percentage rate (APR).