Social microcredit, also called personal microcredit, is thought to improve the living conditions of individuals who cannot access the traditional bank loan. What principles is it based on? Who can claim it? Which address? Younited Credit, a pioneer in the online personal credit market in the country, tells you all about this device.
Social microcredit: decoding
Social microcredit is a form of personal loan. Partially guaranteed by the State and the lender, its interest rate is reduced. This credit is reserved for people excluded from the traditional banking circuit due to a fragile professional situation or modest income. Indeed, in the event of financial difficulties, a request for bank credit is very often the subject of a refusal. The absence of a guarantor is an additional reason for exclusion.
Personal microcredit can for example concern:
- people on fixed-term or temporary contracts;
- people in seasonal or part-time employment;
- unemployed people;
- people receiving minimum social benefits;
- people victims of a life accident (disaster, illness, etc.);
- persons registered in the Personal Credit Repayment Incident File (FICP), who cannot take out a new bank loan;
- persons registered with the FCC (Central Check File).
The repayment of such a loan can be made over a period of 6 months to 4 years, or even 5 years in certain situations. In all cases, the repayment capacity must be sufficient for the loan dossier to be accepted.
A microcredit, for what rate and for what maximum amount?
Social microcredit is a small loan. The latter is adapted to the borrower’s situation. It is generally between 300 and 5,000 $. However, in certain cases, the bank can grant a microcredit for a higher amount. As for the borrowing rate, it is most often of the order of 1.5 to 4%.
Note: what other fees for a microcredit?
Apart from the borrowing rate, personal microcredit comes with no fees. There are no administration fees, insurance costs or even compensation in the event of early repayment.
What project can I finance with social microcredit?
Social microcredit cannot be used to finance any type of project. The objective of this system is to promote banking inclusion, but also and above all to encourage social integration, professional integration, and to improve family life. To be eligible for microcredit, the applicant must have a personal project related to this.
Among other things, this credit could be used:
- for mobility purposes for the maintenance, return or access to employment (purchase or repair of vehicles, financing of driving licenses, in particular);
- to finance basic necessities (washing machine, furniture, etc.);
- to cover funeral expenses;
- to finance poorly reimbursed health costs (dental prostheses, hearing aids, eyeglasses …);
- to finance studies;
- to finance vocational training.
Good to know: what is the difference with professional microcredit?
Professional microcredit is not intended for individuals. It is intended to finance a business creation or takeover project.
However, the repayment of other loans and the repurchase of debts are among the exclusions.