The sale on credit, also called installment sale, is an incentive incentive granted by a merchant who makes a purchase immediately by paying it in several installments.
Credit sales, a common operation
This type of current transaction is part of the family of credit for consumption. The consideration for this facility is the fee for a service, which is based on interest. The conditions of application are specific to the sale on credit.
With a view to professionalism, partnerships between retailers and funding organizations are becoming commonplace.
General conditions of the operation
The credit sale is part of the impaired loans allocated, ie the loan only relates to the object of the transaction. The characteristics are as follows:
• The object remains the property of the seller until full payment as indicated on the contract.
• This is an operation subject to
Annual Effective Rate (APR)
for the calculation of interest.
• A deposit can be paid and a payment in several times must be contractualized.
• The buyer has a withdrawal period.
The repayment of the loan (hence the calculation of interest) starts from the delivery of the purchased good or the supply of the service. In case the delivery is staggered, the starting point is the date of first delivery.
Points to check in the contract
Selling on credit is usually a tripartite contract between a buyer, a seller and a lender. She mentions the purchase to finance, including the following:
- Purchase order number.
- General conditions of sale.
- Total cost of credit.
- Deposit amount.
- Monthly payments.
- Debit and APR rate.
- Depreciation table.
- Vendor ID.
- To validate the sale, the buyer must first accept the loan offer. Once the contract has been signed, a deposit may be claimed under the booking.
The professionalisation of the commercial signs
As part of the implementation of a sale on credit, the stores use the main funding agencies and train their sellers with them as well.
That’s why the credit sale, like any loan assigned, complies with the current rules on consumption and follows a specific order. To know :
- A pre-contractual information phase, during which the lender must verify the solvency (information collected from the Individual Credit Refund Incident File, the FICP).
- An offer of a credit agreement specifying:
- the service or property to be financed and its cash price,
- the maturities of the sale on credit, the amount thereof and the annual percentage rate of charge (APR),
- the withdrawal period and all the contractual elements.