Money lending: beware of abusive interest rates

Running out of money and needing it right away, no matter what. It is in this niche that unscrupulous credit organizations have positioned themselves.

High interest rates

Their ads on social networks are real traps. They promise money right away, without formality, for one, two, or three months. The ideal solution apparently to face an account in the red, at a difficult end of the month or the beginning of the month.

The problem is, these mini-credit deals don’t promise free money – far from it. First, there is the interest rate. Most often around 1 to 1.5% per month, it lets the subscriber think that he will not pay a lot of interest Except that 1% per month, that gives almost 15% per year. In other words, for 100 euros borrowed, it will be necessary to pay 15 euros at the end of the year, if we do not manage to repay the loan within the allotted time of 3 months, which is unfortunately often the case.

Exorbitant management fees

Another trap: management fees: to get an express transfer to your account in the red, you have to pay again. On the face of it, this is easy, since the fees are taken from the amounts loaned. The problem is that these fees worsen the credit blow. When you pay 30 euros in fees to receive 300 euros in your account in emergency, you pay without knowing it 10% immediate interest.

All these practices are bordering on legality, even totally illegal, and moreover, the association UFC-Que Choisir has just lodged a complaint for “deceptive commercial practices” against three credit organizations: Bing, Cashper, and Floabank. If you really need a bridging loan, to get through a bad patch, turn instead to known organizations, depending on large banking networks, such as FranFinance or Cetelem. Very supervised, very supervised, they lend money at less than 1% interest for 1 year. And for small amounts, their loan application review process is simplified.

Find the podcast