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Credit abroad: the solution for all, including banking prohibitions and FICP?


The loan abroad is of great help when there is no longer any possibility of obtaining credit in his country. Indeed, when French banks refuse to grant you credit for various reasons, you can turn to foreign banks. However, there is a wealth of information to know before embarking on a request for credit from a foreign credit institution.

And even if this solution seems advantageous, it also presents risks that every borrower must know. In this article, we will go around the question to inform you and help you find the best loan offer abroad.

Why borrow abroad?

Why borrow abroad?

If local banks still allow you to have credit, do not venture into unknown lands. Although foreign lending is an option open to everyone, it is a big risk and a long process. So, the loan abroad is rather suited to people excluded from the French banking system or those in need of financing to invest abroad.

The banking ban

The banking ban is one of the main reasons that push the French to apply for credit abroad. As its name suggests, the banking ban does not have access to the system as long as it has its status, and so it can not have a credit. Before continuing further, we want to tell you more about this problem.

What is banking prohibition?

The FICP is a database of the Banque de France that lists all payment incidents. People are registered there due to a non-repayment of credit or a deposit of over-indebtedness file with the Bank of France. As a result, the FICP file can no longer obtain new credits until the regularization of its situation and it can last up to 7 years.

How is the loan abroad a solution to this problem?

All banks in France are required to consult the Banque de France file before validating a loan application. If the plaintiff’s name is there, it means he is not solvent or is over-indebted. To escape this heavy penalty, banking prohibitions can therefore apply for a loan abroad. Demand will be more likely to succeed because foreign banks can not access the Banque de France file and will not be aware of the reimbursement incidents.

Investments abroad

You want to invest abroad and you need financing? For the purchase of real estate abroad or any other investment, you can consider applying for a loan directly in the country of purchase. Indeed, it is an interesting option since French banks are often reluctant to grant a loan for the purchase of property outside the territory. However, it must be known that this alternative is not always the best. Depending on the country, there may be additional costs or you may have difficulty keeping track of your records due to distance and time differences. In addition, the borrowing rate may be higher. It will therefore be necessary to weigh the pros and cons before considering this option for your investments abroad.

Border workers

The frontier worker is one who works in one state, while permanently residing in another state. The latter can therefore have access to a loan abroad. First, he must know that he can open a bank account in his country of work to facilitate the receipt of his salary and avoid problems related to exchange rates. Then, he can easily apply for credits from his bank abroad.

Our warnings

Our warnings

Even if the loan abroad is an interesting solution for some cases, there are still pitfalls to avoid. We therefore warn you against 3 main disadvantages of credit abroad.

The scams

The scam is the first problem of the loan abroad. Indeed, since it is a bank outside the territory, interested people do not often have the time and the means to go there and check. Knowing this, crooks are taking advantage of it to make tempting offers to attract naïve customers. To avoid scams, several precautions must be taken. First, if you have the means, we invite you to go there to choose a reliable bank and preferably, opt for the big known banks. Secondly, if it is not possible to move, choose a country where you have contacts: a family member or trusted friends. So you can ask them to inquire and they can then help you choose the best bank. Third, you can ask experts like brokers. They will advise you and guide you to the bank that meets your requirements. Finally, beware of banks that require payment of fees before the validation of the application. The latter are often ill-intentioned.

Exchange rate problems

The change in exchange rates may have an advantage or a disadvantage. If you choose a bank in a country that uses another foreign currency, there is a good chance that there will be a rise in the exchange rate, up or down, and you will lose money. ‘money. Imagine that you borrow an amount equivalent to 1500 USD during the application and that you are obliged to repay 200 USD more because of the change in the exchange rate. And although it is sometimes possible to win, the losses are more frequent. To avoid this, it is advisable to borrow in the USD area. If you borrow from a bank that uses the USD, you will have no concern for exchange rate. But if you find yourself in the obligation to apply for a credit outside the USD zone, know that the credit institution must clearly indicate the terms of access to the applicable exchange rate, the possible costs related to foreign exchange transactions as well as the existence or not of a conversion option.

The language barrier

Language can be a major obstacle when applying for a loan abroad. Indeed, if you do not speak the same language as your bankers, you may not understand them. Worse, you might miss important details if you do not speak the language well enough. So be careful and prefer banks that use the French language.

Inter-home loans abroad

It is also possible to use the loan between individuals at the international level. It is quite easy to find ads from individuals who offer credits on the internet. However, we strongly advise against this because these ads are often false. On the other hand, if no bank can help you, you can always consider borrowing from relatives: family members or friends living abroad. Also find out about reliable personal loan platforms. And most importantly, stay away from creditors who require payment of fees in advance.

What loan can be requested from abroad?

What loan can be requested from abroad?

There are two types of loans that you can apply for abroad: personal loans and mortgages. How to apply? We tell you all there is to know about it.

The personal loan

There are indeed foreign banks that offer personal loans to foreigners. You can make the request to meet your urgent needs on a daily basis: paying bills, buying or repairing a car or buying an appliance to ensure the comfort of your home. Depending on your profile and the bank you have chosen, you could get between 5,000 and 75,000 USD.

The mortgage

It is also possible to buy a house by applying for a loan abroad. You can then apply for a mortgage abroad to buy a house in France or in the country of the Bank. However, it must be kept in mind that the loan is of a high amount, it may be necessary to mortgage a property that you own to reassure creditors. In general, foreign banks can finance your purchase up to 80% of the price of the property. You will have to make your contribution for the rest.

How to apply for credit abroad?

How to apply for credit abroad?

Whether for a personal loan or a mortgage, the first thing to do is to inquire with different banks: ask all the conditions for obtaining the loan and the rates and terms of repayment. Compare and choose the bank that best suits your needs. To avoid over-indebtedness, we advise you to borrow according to your means.

Once you have chosen the most suitable institution, you can start the process by opening an account with the bank. This step is essential and you will have no loan if you are not a customer of the bank. Some institutions may even require the deposit of a certain amount.

Then build your credit application file. In general, these few supporting documents must be provided: a photocopy of your ID, electricity bills, tax notices or pay slips. Always ask your bank, as other documents may be needed to study your application. After having gathered all the elements, check whether it is necessary to provide guarantees or guarantees to reassure the creditors. If everything is in order, send all the required documents and wait for the answer from the bank.

The specifics of the loan abroad

The specifics of the loan abroad

The approach for a loan application abroad is not necessarily identical to that of banks in France. Indeed, it varies from one country to another. Here are some points to know.

Guarantees

If foreign banks do not have access to the Bank of France’s file, they still have the means to ensure the solvency of a foreign customer. Indeed, most credit institutions require strong guarantees: real estate property owned by the applicant or valuables such as jewelery. The mortgage of your property is often mandatory when applying for a mortgage abroad. In other cases, the guarantee must have at least the same value as the loan amount. And if you can not repay the loan, the property will be seized by the bank and auctioned.

Opening an account

The majority of foreign banks require the opening of a bank account before applying for a loan. To be safe, find out about the different conditions and documents needed to open the account. Often, a piece of identification and a proof of address are sufficient. But other documents can be requested: a residence permit, an employment contract or a letter from the employer, a bank letter of recommendation, …

The reflection period

Have you ever heard of the Scrivener Law? This is a law designed to protect borrowers who subscribe to a mortgage loan of more than 21,500 USD. Among the many protections it brings, this law requires credit institutions to provide all the information that the customer might need. Moreover, it also allows the individual to benefit from a reflection period of 10 days before the contraction of a loan. And the customer will even have the right to cancel his mortgage until 5 years after his signature.

Our recommendations for borrowing abroad

Our recommendations for borrowing abroad

As we advised above, it is better to borrow in the USD zone to avoid exchange rate concerns. But the USD zone is vast. So in what country exactly do you have to ask for your loan? Here are our few recommendations to make your job easier.

Belgium

For a personal loan abroad, we advise you to try Belgium. Indeed, you will enjoy a rate almost identical to what is in France. Moreover, since Belgium is not too far away, you can easily get there to check and choose the most suitable bank to your means. Note, however, that rates are not always attractive for other types of loans.

luxembourg

The choice of a foreign bank must always be made according to your current situation. People living in Alsace or Lorraine can easily go to Luxembourg and find a bank that could give them a loan. However, even if the country is full of many banks, prefer large institutions to avoid scams. And most importantly, find out about repayment terms.

Swiss

You certainly think that Switzerland is not part of the USD zone and you are right. However, it remains an attractive option for people who want to enjoy the best conditions for a mortgage or personal loan and who have solid guarantees. Regarding exchange rate variation, you can include a revaluation clause in your contract to work around this problem.

Andorra

Attractive loan terms and comprehensive creditors are waiting for you in Andorra. If you are a member of FICP or if you need help with your investment in Andorra, you can count on the major USDpean credit institutions. Moreover, regardless of the type of credit sought: consumer credit, mortgage or auto loan; you can be sure to find it.

Spain

For the French, there is nothing simpler than getting a loan in Spain. In fact, Spanish banks have the same conditions and procedures as French banks. In addition, you will be spoiled for choice with the many international and local banks that are established there.

Malta

You will be surprised to learn that many banks in Malta offer online loans for French bank bans. Indeed, you have every chance to earn credits up to 1.000 USD. The only drawback is the repayment period which is often too short: at most 1 month. It will therefore be necessary to think carefully before contracting a loan in Malta.

Compare offers and find the best rate

Compare offers and find the best rate

The success of your credit application depends on the choice of the bank. Indeed, it is not enough to contract with the first bank that you find on the internet. It will be necessary to carry out long researches and to compare the different offers in order to find the best rate. For your research, you can use the Internet. In just a few clicks you will find several banks online. The on-site visit is also an option. If you have the means, go to the country of your choice and visit several establishments to know the terms and conditions of payment.

But we must admit that there is nothing more effective than online credit comparator. This search tool will allow you to find the credit that fits your situation. Some sites even allow simulations to determine whether the credit is interesting or not. For that, it is enough to fill correctly the form which will be proposed to you.

How to recognize a good comparator?

We would like to caution you that not all credit comparators are reliable. Some have just been created to advertise. Indeed, instead of displaying the bank that offers the lowest rate, it displays the banks that have paid the most. Here are some tips to help you distinguish good comparators from fake ones. A good credit comparison:

  • always ranks the offers according to the APR rate. This includes interest rates as well as other costs such as filing fees
  • must be able to offer you several options
  • is registered with the Credics and you will be able to verify it on the site of Credics indicating the 8 figures which are communicated by the comparator of credit

What are the advantages of using a comparator?

The online credit comparator offers many benefits. First, this tool makes it possible to find the best offer in the immediate future. You save time because you do not have to move and answers are obtained more quickly. Then you have a wider choice. In addition, you can save up to several hundred USD by finding the lowest rate in the market.

Call on the service of a broker

Call on the service of a broker

We have previously talked about the importance of moving when looking for credit abroad. For people who can not move, they can use the services of a broker. The latter will help you find the best deal and you will not have to worry about scams anymore. However, it will be expected that the fees will be higher because a broker is expensive.

For the broker to be really efficient, he must:

  • to be professional and recognized in his field
  • have a large network of partners
  • to be a good negotiator

Although applying for a loan abroad is really difficult at first, do not despair. Just follow our advice and pay attention to the many pitfalls and obstacles. In addition, make it easy for you to use reliable tools such as online credit comparators and get help from a broker to help you find your way. This will save you time, but also money.

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