The credit simulation allows a borrower to calculate his monthly payments and the cost of his future consumer credit. When it is made with a credit organization, it gives rise to a proposal containing all the credit conditions, to take out a loan with complete peace of mind. What data is a credit calculation based on? Explanations.

Consumer credit simulation: what is it for?

Whether you want to take a mortgage, a car loan, a work loan or even a loan buyout to reduce the amount of your monthly payments, using a credit simulator is essential to calculate the feasibility of your project. Depending on the credit simulator models, we can calculate:

• the amount you can borrow without exceeding your debt ratio;
• the monthly payments to be paid;
• the duration of the credit;
• the total cost of credit (APR) according to its rate and its duration;
• the cost of credit insurance.

Note: consider all possible scenarios!
When calculating your credit, feel free to juggle the term, the interest rate and the loan amount.

As a reminder, the APR (annual effective annual rate) takes into account all the costs relating to the credit, namely:

• bank interest (or nominal interest rate);
• application fee;
• the cost of borrower insurance (this insurance can be taken out both with the bank granting the loan and with another insurance company);
• guarantee costs (the mortgage is a guarantee for a mortgage, for example);
• and any other fees charged for granting the credit 

Credit calculation: is it really necessary?

The loan simulator is a simple and efficient calculation tool that abounds on the Net. If at first glance, calculating a credit may seem superfluous, it is not. By taking note on the one hand of the amount of the monthly payments which you would have to pay according to such or such borrowing duration, and on the other hand of the total cost of the loan, you will have matter to study your financial situation . The loan simulation is a preliminary step, without any commitment. If the result fits with your borrowing capacity, then all you have to do is get closer to banks and credit institutions!

Consumer loan simulation: what information to provide?

Before any credit calculation, it is necessary to know the exact amount of your project:

• for a mortgage, account must be taken of the work to be carried out, for which quotes must be requested, as well as all additional costs;
• for a car loan, or credit allocated to the purchase of a household appliance, it suffices to know the price of the product and its delivery.
• for a credit buy-back, this is the transaction that requires the most information. The credit simulator will indeed request the number of credits to be reimbursed, but also the details of the borrower’s financial situation: income, charges, etc.

Note: two forms of credit buy-backs

A distinction is made between buying consumer credit and buying mortgage credit. The first concerns any type of consumer credit (personal loan, work credit, etc.) and may also include certain debts (taxes, bailiff, etc.). As for the repurchase of mortgage credit, it includes both consumer credit and mortgage.

There are two types of credit simulation:

• simple financial calculators, where any credit is simulated by entering just the amount, the rate envisaged and the duration of the repayment;
• credit simulators from lending agencies, which are much more need because they take into account the financial situation of the borrower and respond by making a credit proposal.

For the latter, the information to be provided is as follows:

• the identity, nationality and age of the borrower and the co-borrower if there is one;
• family situation: marriage, common-law union, PACS …;
• the number of dependent children and their age;
• household expenses: rent, other credits, energy costs, taxes …
• the amount of the project;
• the professional situation: CDD, CDI, liberal profession, civil servant, intermittent of the spectacle, etc. ;
• the amount of income by means of pay slips or tax sheets;
• possibly, all ancillary income which the borrower can attest to and which are all positive points for his credit request: alimony, property income, investment income, etc. ;
• if the borrower is the owner, the title to the property.

You now have all the cards in hand to calculate your consumer or real estate credit. Thanks to online simulation tools, it has never been easier! Last advice: before borrowing, compare several loan offers. In this way, you will give yourself the best chance of finding the best borrowing rate!