Regulated Loans: Advantages and Conditions

Regulated loans are credits subject to specific conditions, usually defined by the State, in order to encourage certain types of financing. These loans are often used to facilitate access to property ownership, finance studies, or support projects of general interest. In exchange for these advantages, borrowers must adhere to strict conditions to benefit from these loans. This article explores the main types of regulated loans, their advantages, and the conditions to access them.

What is a regulated loan?

A regulated loan is a credit whose conditions (interest rate, amount, duration) are set by the State or by public organizations. These loans are often offered by banks and credit institutions, but within specific agreements. They can be used to finance various projects, such as buying real estate, carrying out energy improvement works, or financing studies.

The main types of regulated loans

The most common regulated loans include:

• Zero-interest loan (PTZ): This interest-free real estate loan is designed to facilitate access to property ownership for first-time buyers under income conditions. The PTZ can finance part of the purchase of a new or old primary residence with renovations.
• Housing savings loan (PEL): The PEL allows you to build savings to finance a real estate project, with the possibility of obtaining a loan at a favorable rate. The conditions of this loan are determined when opening the plan.
• Social accession loan (PAS): The PAS is a real estate loan intended for low-income households wishing to acquire their primary residence. It is subject to income ceilings and can be combined with other aids, such as the PTZ.
• Student loan: This loan is intended to finance studies and expenses related to student life. It can be guaranteed by the State, allowing students without income or collateral to benefit from financing.

Advantages of regulated loans

Regulated loans offer several significant advantages:

• Favorable interest rates: Regulated loans often offer interest rates lower than conventional loans, or even interest-free (like the PTZ). This reduces the total cost of credit.
• Favorable repayment conditions: Regulated loans may include repayment conditions adapted to the borrower's financial capacity, with long terms and reduced monthly payments.
• Accumulable aids: Regulated loans can be combined with other aids or subsidies, such as local aids, tax credits, or Anah subsidies for energy renovation works.
• Facilitated access to property: Thanks to regulated loans, low-income households can more easily access property or financing for important projects, such as studies or home improvements.

Eligibility conditions

To benefit from a regulated loan, several conditions must be met:

• Income conditions: Regulated loans, like the PTZ or PAS, are often subject to income ceilings. Only households whose incomes do not exceed a certain threshold can apply.
• Use of funds: Regulated loans are generally intended for specific purposes, such as buying a primary residence, carrying out energy improvement works, or financing studies. The funds must be used in accordance with the loan's purpose.
• Duration and amounts: Regulated loans may be subject to amount and duration limits. For example, the PTZ can only finance part of the purchase price of real estate, with the rest covered by other loans or personal contribution.
• Declarative obligations: Borrowers must meet certain declarative obligations, such as justifying the use of funds or providing documents proving their eligibility (tax returns, proof of residence, etc.).

Concrete examples

Let's assume that a first-time buyer couple wants to buy a new house worth €200,000. With a PTZ covering 40% of the purchase price, they can borrow €80,000 interest-free. The remaining financing will be covered by a conventional real estate loan. Thanks to the PTZ, they save on interest, reducing the total cost of their acquisition.

Laws regulating regulated loans

Regulated loans are regulated by specific laws, such as the Construction and Housing Code for the PTZ, or the Education Code for student loans guaranteed by the State. These laws specify eligibility conditions, repayment terms, and the obligations of borrowers and lenders.

Conclusion

Regulated loans are valuable tools to facilitate access to financing for important projects, such as buying a primary residence or pursuing higher education. With favorable conditions and strict oversight, they offer accessible financing opportunities to a wide audience. However, it is essential to understand the eligibility conditions and associated obligations before taking out a regulated loan, in order to maximize the benefits and ensure the success of your project.