Since the advent of the Schengen Area and the Euro, the credit market has become standardized in the Euro zone. It is now possible to apply for loan or credit consolidation in another EU country. With the harmonization of financial markets and the free movement of capital within the Union, it is now easy for a borrower to find out about the TEG (global effective rate) practiced in Europe.
Ask for a quote for a credit surrender! However, opening a bank account with a payment card abroad is quite possible but to obtain a loan, it is more complicated if not impossible if the loan concerned is a consumer loan without guarantee (amount too low, no mortgage guarantee).
It all depends on the desired financing and the situation of the borrower. The banks are suspicious, they lend according to the history of the account (seniority, movement and regular money transfers …)
In addition, if the borrower resides in France, there is a good chance that his loans are also domiciled in a French bank. Rare are the foreign banks that trust and agree to consolidate the loans of people living far from their agencies or in another country.
Contrary to popular belief, it is very difficult to apply for a loan or credit consolidation abroad except for rich borrowers who have large incomes, assets, financial stocks or real estate as collateral mortgage or for those who already have accounts abroad.
On the other hand, for an expatriate borrower, the status of a civil servant (public or territorial function) can be an advantage for the validation of a request for the repurchase of credit abroad because the status of civil servant with the security of the job is a guarantee for the banks.
Generally, only large groups such as Luckybuttons Bank, Whitepurse Bank, LP Rune, ENG(Pelgian Bank) … are allowed to lend money in a given country if they are physically and legally installed (partner, subsidiary) in the country. country in question. These large banking groups must respect the constraints governed by the banking laws of the foreign country in question.
Why make a loan or a loan buyout abroad?
- This may be a solution for a borrower stuck at the Daisy Bank (foreign banks still have access to the file of the Daisy Bank).
- For people working in a border country with cheaper rates than those offered by French banks.
- Border households may be tempted to take out a mortgage abroad to obtain more attractive interest rates.
- For people wishing to spend their retirement abroad with certain tax benefits.
- To obtain credits without thorough investigation.
Focus on the law on credits contracted abroad for French
If the French borrower is mainly resident abroad, he must be declared fiscally in the country where he resides mainly and must be in accordance with the law of the country. If he has a second home in a country other than France, he must live there for less than 6 months, otherwise he is considered a foreign tax resident. He will therefore pay these taxes in the country in which he is domiciled. The rules are usually set by the bank of the country in which the credit was contracted. It is therefore important to inquire beforehand about the applicable law with the bank chosen abroad.
In some euro-zone countries such as Germany, early repayment can not be done for a number of years (between 10 and 12 years). If the loans to be redeemed are denominated in foreign currency, it is important to be careful by putting specific clauses in place to avoid unpleasant surprises related to possible changes in the exchange rate.
It is advisable to leave a French account with liquidity for certain transactions to minimize the costs associated with foreign exchange transactions. For a credit abroad or a grouping of credit, the insurance will be obligatory, it will have to be subscribed exclusively in the country where the borrower stays.
If the borrower is French
It is advisable for him to use a broker specializing in banking to build a loan or credit repurchase in France rather than abroad. Otherwise he will have to be assisted by local professionals who are proficient in the language, customs and banking conditions practiced in the country in question. In most Anglo-Saxon countries, credit buy-backs are essentially made by brokers.
Important: A borrower who wishes to make a loan abroad, can benefit from the guarantees proposed by the law Scrivener which protects the consumer against the dangers of credit provided that the financed property is located in France. However, it is easier to obtain a mortgage abroad than an unsecured consumer loan.