What is the wear rate?
There are seven banks specializing in the redemption of credit and sharing this market in which the demand is high.
It is common for an applicant to obtain an agreement from a bank while all others have refused the request.
The more qualitative a request is, the higher the number of banks accepting the demand.
However, although different loan buyback banks work in the same way overall, they are free to determine the interest rate for each request.
In order to protect borrowers with too high interest rates, the Banque de France has defined maximum interest rates for each loan transaction: this is the rate of attrition.
Thus the banks of repurchase of credit must not exceed this rate of the wear under penalty of legal proceedings.
An organization lending money at a higher interest rate than the rate of attrition is called a usurer.
In the event that a bank lends money at an interest rate higher than the usury loan and the borrower has started to repay, the bank will have to repay the borrower the amount overpaid.
The calculation of the wear rate
Every quarter, the Banque de France updates the usury rate for each type of loan: credit redemption, real estate loan and consumer loan.
For the determination of the rate of wear, the Banque de France relies on the interest rates charged by several banking organizations.
Taking into account the total amount lent by banks, the Banque de France averages the interest rates applied.
The result obtained is then increased by approximately 33% and makes it possible to obtain the attrition rate of a credit redemption and other types of loans.
It is important to stress that the Banque de France reserves the right to determine the rate of wear arbitrarily.
The current rate of wear of a credit surrender
In the second quarter of 2018, the usury rate of a loan buyback defined by the Banque de France is 5.89%.
Thus, when applying for a buy back of credit, it is important to check that the TEG (total effective rate) is well below the rate of wear.
It is also advisable to ask the broker for repurchase credit the rate of attrition at the time of receipt of a loan consolidation offer.
Although it is important to know the attrition rate when applying for a repurchase of credit, all banks comply with the maximum rates defined by the Banque de France.