To protect you from abuses, in case of loan of money especially in the context of a mortgage, the legislation provides for an overall effective rate that praetors must not exceed. This is the rate of wear. What does it cover, how to calculate it?
Wear rate and legislation
According to Article L313-3 of the French Consumer Code: "Usurious loan constitutes a conventional loan granted at an effective percentage rate that exceeds the average effective rate practiced during the quarter by more than one-third. precedent by credit institutions for similar transactions involving similar risks ".
We must remember that the usury is an offense punishable by imprisonment of two years and a fine of 45,000 euros or one of these two penalties only. In addition, excessive collections must be repaid to the capital of the receivable. If it has been repaid, the lender must return the sums improperly received, along with the interest.
The Banque de France sets quarterly rates of attrition for each loan category, based on average effective rates. This rate is calculated from the average Interest rates charged by lending institutions increased by one-third. They are then published in the Official Journal.
To know: The legislation relating to the repression of the usury is governed by the Code of the consumption (articles L313-3 and following, D313-6 and following) and by the Code monetary and financial.
The calculation of the wear rate
Banks are obliged to provide you with the rate of wear in force but if you have doubts here is how to proceed.
It is necessary to compare the global effective rate (TEG) and to add to it a minimum of 30% to obtain the rate of wear.
- For fixed rate mortgages there was an average effective rate in the fourth quarter of 2014 of 3,43%, which puts the wear rate of the 1st quarter of 2015 at 4,57%.
- For fixed rate mortgages, the average effective rate in the fourth quarter of 2014 was 3,11%. The wear rate in the first quarter of 2015 is therefore 4,15%.
To note: The TEG is clearly mentioned and does not require any calculation from you. It is obtained by adding to the nominal interest rate (TNC) or base rate, fees, commissions or remunerations of any kind, including mandatory insurance premiums.