A loan is a contract - drawn up by a notary in accordance with article 1813 of the Civil Code,, under which the Bank grants a certain amount of money to cover the assessment of creditworthiness. The borrower agrees to return the money in monthly or periodic installments including interests, as stipulated in the contract. It can be fixed, variable or variable with roof. The calculation of the rate is done with financial mathematical formulas.
A loan is called building loan when it concerns the financing of estates yet to be built; It is delivered to states of progress of works. We talk about land loan if it affects existing buildings for the purposes of purchasing or restructuring. The Bank may also grant the loan for different purposes (cash or consolidation of accounts payable).
To secure its credit, the Bank generally enrolls a mortgage (security interest), in accordance with article 2808 and following of the Civil Code, on the property offered. The mortgage gives the Bank the right to expropriate the property if there is no obligation fullfillment.