From 1er February to 1er July 2023, wear rates, serving as ceilings for the costs linked to a bank loan, will be updated each month by the Banque de France, rather than quarterly. In addition to impacting the credit market, this temporary measure will also have an impact on your borrower insurance.
Wear rate and loan insurance: what is the link?
The Banque de France defines the usury rate as being ” the maximum annual effective annual interest rate (APR) that can be applied to you when taking out a loan “. As a reminder, the APR is an indicator that does not only take into account the so-called interest rate nominal of a bank loan.
The APR is calculated on the basis of all costs related to the subscription of your loan. To be precise, the Banque de France speaks of “ elements which constitute a condition for obtaining the credit or for obtaining it under the conditions announced and cites certain examples, including application fees, but also and above all, “the costs of insurance and compulsory guarantees “.
What does the new calculation of the wear rate change for insurance?
The APR is therefore partly determined by the cost of your loan insurance. At the same time, the cost of your insurance will depend on your profile. Individuals who present a significant risk for insurers (for example in the case of the practice of an extreme sport or a health problem) are therefore particularly impacted by the scissor effect between the increase in rates practiced on the market and less frequent reassessments of wear rates.
Thanks to a monthly update of the wear rate, people with risky profiles in the eyes of insurers will therefore be able to more easily reconcile the higher price of insurance and the other costs linked to the loan. It will thus be possible for them easier access to a bank loan. To simplify your procedures, it is also advisable to call on a broker to benefit from personalized support from a professional.
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