How does one calculate a credit in fine?
By browsing the repayment schedule of a repayable loan with a constant maturity , we realize that the monthly payment is identical for the duration.
This includes a portion of the amortized capital , that is to say, which has been repaid to the bank, and a part of interest .
In the case of a credit in fine, the column of the monthly payment corresponds to the interest of the loan.
Comparison of a depreciable loan and a credit in fine
You will verify by yourself that the credit in fine is more suited to rental investment than the main residence and the advantage is primarily tax.
This is why the latter is generally proposed in the context of tax exemption operations Borloo or Scellier.
To facilitate your understanding, we have voluntarily taken the same rate in both cases, but know that the rate of a loan in fine is generally higher.
- Loan: 150,000 euros
- Duration: 20 years
- Rate: 4%
- Insurance: 0.30% on borrowed capital
|
Monthly excluding insurance |
Insurance | Total expiry |
Cost of credit |
Cost of insurance |
Total cost |
|
| Depreciable loan | 908.97 | 37.50 | 946.47 | 68,153 | 9000 | 77153 |
| Ready in fine | 500.00 | 37.50 | 537.50 | 120,000 | 9000 | 129000 |
As can be seen, the cost of credit is significantly higher for the same amount in the case of a credit in fine. In return, the monthly payment of the principal residence will be lower.
However, this calculation is incomplete and must be reconciled with the result from the investment transaction that guarantees the loan.
Comparative example with an investment transaction
To guarantee the loan , you have to guarantee enough capital to reach the loan amount at the end of the loan, that is to say 150,000 euros in our example.
Let’s assume a yield assumption of around 4% on a fund in euros, which corresponds to average rate, reached by many companies.
By investing 70,000 euros on a life insurance policy over a period of 20 years and on the basis of a yield assumption of around 4%, you will have a term capital of 153,000 euros, which is enough to repay the bank.
As can be seen, in the case of a principal residence , the question of a credit in fine arises only if one has a capital. Thus, to refine our analysis, we will compare the two following situations.
- Acquisition with a personal contribution of 70 000 euros thus final loan of 80 000 euros
- Loan of 150,000 euros in fine with placement of the sum of 70,000 euros on an investment contract.
| Monthly | Insurance |
Total Deadline |
Cost of credit |
Cost of insurance |
Cost total |
|
| Depreciable loan | 424.19 | 17.50 | 441.69 | 31,804 | 4200 | 36004 |
| Ready in fine | 500.00 | 37.50 | 537.50 | 120,000 | 9000 | 1290 |
Results analysis
- Result with a depreciable loan
(70,000 euros contribution) + (441,69 * 240) = 176,005 €
2. Result with a loan in fine
(537,50 * 240) + (70,000 euros investment contract) = 199,000 €
The second choice would cost € 22,994 more than a conventional loan.
This difference may partly be offset by the good results of the investment contract, which is nevertheless unlikely as the bank will refuse any investment in risky media.
You can reasonably propose an 80% type of allocation on a support in euros and 20% on a profiled fund, a balance type of which only a part will go on the stock market.
The pledge of the contract
The guarantee of the contract will result as a consequence for the subscriber, the formal prohibition to make any withdrawal, even partial. In any case, using capital as a personal contribution, the sum would no longer be available.
Namely : the bank will probably offer you its own contracts. Know that double selling is prohibited in France. Ask to compare the investments of different institutions.
In any case, in the case of a credit in fine, the bank can not refuse the loan of your principal residence on the pretext that the investment pledged is underwritten by another organization.