The notion of controllable rate appeared in 2008 after the information report tabled by MP Frédéric Lefebvre. This set of proposals aims to improve the information of borrowers on adjustable rate loans . Among these provisions is a measure requiring banks to offer an alternative capped loan in any variable rate loan offer. This alternative can take various forms such as a capped rate whose nominal rate can not be two points higher than the floating rate rate. They may also be monthly payments limited in amount or duration. Although these provisions were not incorporated into the Consumer Code, an undertaking was signed by the French Banking Federation and the French Association of Financial Companies.
Rate manageable, an offer that is alternative
Clément and Marine decided to apply for a loan of $ 10,000 to refurbish their home. They are at the stage of comparing offers. One bank offers them a variable rate loan of 4.80% over a period of 5 years and another at a rate of 5.2%, which is capped at 1%. The first proposal is interesting, provided that the rates are not affected by a sharp rise, which is difficult to predict over a period of five years. The second is more expensive, but the rate can not exceed 6.2%, regardless of the possible rise in market rates. Between security and immediate economy, the couple chooses the offer at a manageable rate thus paying its peace.
Consumer credit proposals
For several days, Junard has been studying consumer credit proposals. His bank offers him a solution in the form of a revolving loan and an alternative with capped monthly payments. The calculation over 5 years gives significant differences, the revisable rate being initially cheaper. There can be no guarantee, however, that the rate will not go up. The future borrower finally opts for capped monthly payments, thus being able to manage his budget with greater certainty.
Although he has the choice between a discounted consumer credit proposal at 4.20% and another with a rate of 5.60% capped at 1.5, Mario moves without hesitation towards the first. He thinks that the risk is slim to see the rate increase significantly during the first two years of his loan for a total period of 4 years and covering $ 15,000.