The rates applied to overdraft accounts for professionals and businesses are reaching new heights. In the 2nd quarter of 2024, the usury rate for this loan category will approach 19%.
Among the regulatory mechanisms designed, in France, to protect the interests of users in the face of the appetites of players in the financial sector are the wear rate. These thresholds represent the maximum rates that banks are authorized to practice, depending on the characteristics of the credit: its amount for consumer loans, its repayment period for real estate loans. They reflect the rates actually applied: to calculate them, each quarter, the Banque de France relies on the market averages of the previous quarter, which it then increases by a third.
These safeguards, however, only apply to individuals. The rates for loans granted to professionals and businesses are not capped. With one exception: overdrafts taken into account.
In the 2nd quarter of 2024, this threshold reached 18.68%, reflection of the average effective rate practiced in the 1st quarter (14.01%). A historically high level, directly linked to the increase in the ECB’s key rates, which had a strong impact on the rates of all types of loans granted to individuals, professionals and businesses. Two years ago, before the sudden rise in rates, it was still 14.96%.
Reminder: overdraft rates applied to individuals are also capped, even if they do not have a specific category in the breakdown made by the Bank. For them, it is the consumer credit usury rates that apply. Currently, the maximum rate authorized for an overdraft of less than 3,000 is 22.32%. Some banks also set the rate applied to unauthorized overdrafts to this legal maximum.
Rates for authorized or unauthorized overdrafts in banks