While residing in France, you can approach a foreign bank to borrow money. Finance the purchase of your property by obtaining a loan elsewhere than in France. How to take out a car loan or a consumer loan using a foreign banking organization? We tell you all about the steps to borrow a sum of money from a bank outside France. Also find out what risks to take into account before approaching foreign establishments.
Summary
Take out a loan from a foreign bank
Be aware that by canvassing a foreign bank, your request will only be accepted under conditions. The first thing to do? Open a bank account at the institution. Then, produce certain documents such as proof of income. The bank will also want to know your assets. Before granting you a bank loan or not, the organization will ensure that you are able to repay.
On the other hand, by taking out a mortgage in a foreign bank, you will have to comply with French legislation. This requires a mortgage on the property. You will have to call on a French notary.
French law also requires the bank to mention certain important clauses in the loan agreement. The withdrawal period, for example, must be entered.
Why take out a loan from a foreign bank?
Several scenarios can make you want to seek a bank abroad, European or not.
Borrowing money abroad is possible if you are banned from banking in France. Indeed, the files listing banking prohibitions are not accessible to banks outside France. A good way for the files to concretize their project.
Cross-border workers can also call on a foreign bank. In their case, this is even recommended in order to protect against exchange rate risk. On the other hand, by working in the country concerned, they have a better chance of seeing their file accepted.
Read also: How to make a loan while being registered with the Banque de France?
Borrow money abroad, what to consider
Before financing your project with money from a foreign bank, it is essential to know the pitfalls.
By borrowing in a currency other than the euro, you are faced with the fluctuation of the exchange rate. This can land you in a difficult situation. Indeed, if the exchange rates are increasing, your maturities will increase considerably. To avoid any unpleasant surprises, ask for a revaluation clause.
Also be vigilant with regard to exchange commissions. If you need to make monthly transfers from your French current account, exchange fees and commissions may apply.
Also find out about the legislation in force in the country concerned. Prepayment provisions may vary from state to state. For example, in Germany, early repayment is not possible before ten years of loan.
Finally, if your decision is made, and you really want to borrow abroad, first consult the single register of intermediaries in insurance, banking and finance. Check that the bank is listed in the register and therefore has authorization. Please note that this approach is only valid in the countries of the European Union. Preferably, apply to a major bank. And beware of foreign loan classifieds. These are often scams.
Read also: Borrow with a salary of 2000 euros
