Definition of the credit term

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The term generally used to announce the cost of a credit is TEG. This one is to be distinguished from the rate of credit itself. Indeed, the TEG or rate global manpower specifies the overall costs of the credit. I.e. that it integrates the interests of the credit, the expenses of file, the contributions of insurance and the possible ancillary costs. The annual and monthly TEG must be obligatorily mentioned in any publicity or contract, and makes it possible to the consumer to calculate and compare the cost prices of the various appropriations.

Short, long or medium term?
One can distinguish the appropriations according to their duration:

From 1 day at 2 years, the short-term credit, often used for a consumer credit
From 2 years to 7 years, the medium-term credit, often used for a consumer credit or a credit car
Beyond 7 years, the long-term credit term, very often for a real estate credit
Obviously, the interest rate of the credit will vary according to the duration of the credit, the borrowed amount, and the risk that this one generates for the banker.

The rate of credit: fixes, fixes flexible or revisable?
Once the amount of the evaluated credit and its duration, remains to define which type of rate credit to choose. The fixed rate is simplest to include/understand, because once defined, it will never vary. That can be a good advantage to consider as of now and peacefully the future. Only, in the event of fall of the rates of credit, you will not be able to benefit from this fall. In the same way, you will not be able to change the duration of the credit. On the other hand, a flexible fixed rate enables you to preserve the advantage of the fixed rate, with the additional possibility to be able to modulate your monthly payment, and consequently the duration of the loan. Lastly, the loan atrevisable rate him, is indexed on the Euribor index 3 months or 1 year, and allows you to profit from the falls of the rates, if it lowers there A. If you contracted your credit whereas the rates were high, when they drop, your monthly payment or duration of your credit drop. Also, it is necessary to be careful, because in the event of rise, your credit will be to you much more expensive. The shorter the duration is, the less you take risks…( Finance Information City )