The revolving credit market is experiencing a fairly average first half, this is one of the conclusions of the latest survey published by the French Association of Financial Companies (ASF). The Credither Guide reviews the evolution of this type of loan over the last 6 months.
A consumer credit market is recovering
Production of new consumer loans increased by + 2.2% year-on-year, after + 6.2% in the first quarter. Over the first half of the year, the increase reached + 4.1%, a sign that ” the phase of recovery of the activity started over the last two years is continuing “. Only downside: growth decelerates in June. In comparison, production was close to + 11% in January.
The revolving credit trail
Even though growth is slowing down, it remains real. Except that the revolving credit does not benefit from this increase. Whatever the ” angle ” chosen, the result is the same. In May alone, the revolving credit fell by -2.7% compared to the corresponding last year. In the first quarter? -0.2%? At the second ? -1.7% On the whole 1st semester? -0.9%.
It’s not really a novelty. This activity is very framed in recent years and has difficulties to take off again:
-5.9% in 2012;
-2.8% in 2013;
-1.7% in 2014;
-3.3% in 2015;
+ 0.1% in 2016.
The revolving credit, how does it work?
Revolving credit is a type of financing that differs from amortizable loans (traditional loans such as personal loans or mortgages). It allows to have at any time a reserve whose amount is fixed beforehand by contract.
The borrower may use this sum at any time, in whole or in part. He only begins to repay his loan after using the reserve. Interest only relates to the amount used. The amounts reimbursed make it possible to reconstitute the reserve.
The revolving credit is a backup solution. It meets a need for immediate cash. For example, if your washing machine breaks down, you can ” dip ” into your supply to buy another one.