The crisis caused by the Covid-19 epidemic is hurting your personal finances? To deal with this situation, you have a number of solutions, more or less effective, more or less quick to implement … and more or less expensive. Our advice to help you make the right choices, whether you need a boost for a few weeks, or rather rethink your budget in the medium or long term.
Use your savings wisely
This is a good solution if you have cash placed in tax-advantaged savings accounts (the least profitable), or failing that in a Livret A or an LDDS (Livret Développement durable et solidaire). Also think about your employee savings: online, you can withdraw the assets available in ten days.
On the other hand, it would be a shame to tap into an old home savings plan. You would be forced to "break" it, and its benefits would be lost forever. Likewise, making a withdrawal from your life insurance can be penalizing. To then replenish your account, you will pay any entry fees provided for in the contract, and you will have difficulty accessing the fund in euros, which is limited by insurers. And if you have invested in units of account, now is not the time to dig into it given the drop in stock values.
Our advice. For a temporary payday, it is better to ask the insurer for an advance, that is to say a loan guaranteed by the capital available on your contract. You let your savings grow and you repay as soon as possible.
Authorized discovery, a temporary solution
Many banks grant their customers an authorized overdraft, the amount of which varies depending on the card or package purchased, income deposited in the account, etc. If it is insufficient, try to negotiate it with your advisor. "Overdraft is cheaper in online banks", says Laure Prenat, Managing Director of Panorabanques."The rates are 7% to 8% in general, against 16% in some traditional banks". Avoid exceeding the authorized amount. For each transaction (payment by card, withdrawal, etc.) beyond the limit, the banks charge an intervention commission (8 € maximum, within the limit of 80 € per month) , and the warning letters (about 20 €). "Here again, online banks are less greedy. Most do not charge intervention fees", adds Laure Prenat.
Our advice. The authorized overdraft is practical for dealing without delay with a temporary concern. But the interest rate is high. If your account remains in the red for a long time, it becomes more expensive than some credits.
Withholding tax, a flexible rate
If your income has gone down, your monthly tax has followed the same path. But if you think that this automatic adjustment is insufficient, you can modify your direct debit rate in the "Manage my direct debit at source" section of your personal space, on impots.gouv.fr. "In principle, this downward adjustment is only possible if the amount of the new levy is more than 10% lower than the old one. But, given the health crisis, the administration has indicated it will be tolerant of any mistakes.", indicates Me Louis-Marie Bourgeois, tax lawyer in Paris.
Our advice. Do not count on an immediate effect, because the administration must send your new rate to the organization (business, etc.) that levies tax on your income. It usually takes one to two months.
Deferring tax installments, a solution for the self-employed
The self-employed can also lower the rate of withholding tax to reduce the amount of monthly or quarterly down payments. "In addition, they have the right to defer the down payments on profits (BIC / BNC / BA) to the due date of the following month or quarter if their situation warrants it.", underlines Me Louis-Marie Bourgeois. The monthly installments can thus be deferred three times in the year, and the quarterly installments once a year, without penalties, until December 31st. In the most difficult situations, the administration also accepts that a deposit is deleted and its payment deferred (for changes in social contributions, see the urssaf.fr site).
Our advice. Take these steps before the 22nd of the month so that the changes can be taken into account the following month.
Rent, can I defer it?
If you are having trouble paying your rent, contact the landlord to discuss temporary staggering. Know that nothing forces him to accept, and especially do not put him in front of a fait accompli. "Even if the courts ceased to function during the confinement, and if the resolutive clauses (such as the one which allows the automatic termination of the lease in the event of non-payment) have been suspended, you risk being sued afterwards", warns David Rodrigues, lawyer at the CLCV.
Personal loan, rates to compare
It is possible to take out a consumer loan without proof of purchase or use. Take the time to compare the rates of these personal loans charged by banks and lending institutions, including online. "Some twelve month loans start at 1% interest. And for longer durations there are offers around 5 to 6%", indicates Laure Prenat. Of course, you will have to answer questions on your professional and family situation, because the establishment measures the risks before giving its agreement. You will often be asked for a check, in order to prove that you do not are not prohibited from checkbook.
Our advice. Do not wait until the last moment as the timeframe for making the money available can be longer than two weeks.
Credits, reduce monthly payments
"Almost all mortgage loans have an option that allows you to reduce the monthly payment from 20% to 30%, for two to six months, sometimes a year", recalls Maël Bernier, director of communication for the credit broker Meilleurtaux. The operation is often free, or sometimes invoiced some tens of euros. It applies from the next monthly payment, if it is not too close. Your credit is lengthened, and its cost therefore increases a little. But nothing will prevent you from increasing the monthly payment later to speed up repayment. Some loan contracts even provide for the suspension of monthly payments for three months to one year , and their deferral at the end of the loan. The capital is then repaid even more slowly, the interest will therefore be higher. A fortiori if you also suspend the payment of the interest, which is then added to the capital and in turn generates interest .
Our advice. If you have consumer loans outstanding, check your contracts to see if they allow for modulation or postponement of maturities.
Instant loan, in case of emergency
Some establishments offer to immediately make a small sum of money available to you, to be reimbursed in three installments (30, 60 and 90 days later). This is the principle of Clic, of Boursorama, for customers for at least three months of the establishment. Up to a maximum of € 2,000, the amount varies depending on your outstanding bank assets. Count 1 to 2% interest. Same principle for the Lydia Instant Loan, between € 100 and € 1,000, paid immediately into your Lydia account and repayable in three months. But the costs are higher. Thus, for 750 € borrowed, you will pay 3.13% + € 19.9 fixed costs, or € 43.37.
Our advice. Lydia offers a 14-day payment option, which is less expensive, since it has no fixed costs, and always at the rate of 3.13%.
Revolving credit, use with moderation
If you have already taken out a revolving credit, little or no use, drawing on it allows you to bail yourself out instantly, without having to justify yourself. A solution to consider if the rate is lower than that of an authorized overdraft (but this is not always the case, far from it) and if you can prepay it when you want. If you don't have revolving credit outstanding, it's best to take out a personal loan.
Consolidate your loans, as a last resort
Do you have several credits, and the repayments have become too heavy for your income? "Some organizations, often subsidiaries of large banks, offer to combine them into a single loan, the duration of which is adapted so that the new monthly payment is compatible with your repayment capacities.", explains Sandrine Allonier, broker Vousfinancer.com. The rates of these operations are on average around 3.5% to 4%.
Our advice. This should be considered as a last resort, as you will often have to pay significant fees. In addition, your new loan can turn out to be much more expensive than the previous ones, especially if there was a mortgage loan at attractive rates.
No tax measure for individuals
As explained by Me Louis-Marie Bourgeois, tax lawyer, "the state has not announced any specific tax measure for individuals, even though they are facing financial difficulties linked to the economic consequences of the health crisis. Today, withholding tax already allows you to adjust your tax according to your income. Since its entry into force, in 2020 you pay tax on your income for 2020, estimated according to your previous declaration, but adjustable online if you wish. Thus, there are fewer reasons to ask the Administration for payment delays. In addition, the state has taken many measures to preserve the income of the French as much as possible, in particular by significantly increasing compensation for companies that use the partial activity scheme. He therefore does not consider it necessary to make an additional tax gesture."
The main expenses of the French
Housing 27%
Transportation 14%
Food (excluding alcoholic drinks) 13%
Leisure and culture 8%
Hotels, cafes, restaurants 7.5%
Housing equipment 5%
Health (after reimbursement of the Social Security) 3%
(share in household budget, in 2018)
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