We have gathered the following tips in the hope that they can help you further if you are planning to apply for a loan or credit. Borrowing money comes with its dangers, in the first instance you have to be aware that the borrowed amount including interest must be paid back.
Request loan: prepare a file!
With any loan it is important to prepare a good dossier and to forward certain data or to keep it on hand. Every bank or institution will assess your credit application differently, a well-prepared and complete file always makes a good first impression when applying for a loan.
Each institution uses different standards for the assessment, but you can be one step ahead if you borrow a maximum of 90% of the purchase value and do not have to repay more than 40% of your net income to the bank. This will regard the bank as positive signals.
A personal loan on installment or additional guarantee on an existing mortgage registration is not a good signal to the bank. Try to avoid this if possible.
A financial institution will ask you to finance yourself as much as possible. Young people who borrow for the first time for their own home will often have to turn to their parents to help them with this.
With or without the help of your parents, you have to make sure that you also keep sufficient reserves to protect yourself against unforeseen circumstances. It is generally recommended to keep a reserve approximately equal to a salary of three to six months.
It must concern actual own resources, and therefore no personal loan , money reserve or additional guarantee on the already existing mortgage registration.
Is borrowing really necessary?
Before you take out a loan or loan, evaluate your situation well and check whether the loan is really needed. Sometimes it is better to save first or address your current savings. Since the interest rates on the savings books are not that good anymore, you can limit losses by using part of this savings credit.
There is indeed a difference between obtaining a loan when you work via interim work, or when you have been able to present your seniority for several years. Banks always want to be sure that you can repay the requested loan. Anyone who can present at least three years of seniority with the same employer is certainly one step ahead of his loan application.
Compare loans and credits!
Compare loans to find the best rates and to find out what kind of loan is best suited for your situation. Do not hesitate to ask additional advice from your lender.
Comparing loans is done on the basis of the total costs, since the official rates do not reflect the total picture. As far as personal loans are concerned, this is quite simple: every loan provider is obliged to mention the APR at the loan offer. The APR shows in a percentage what the total cost of a loan is. This is somewhat more difficult for mortgage loans, since you also have to take account of a debt balance insurance or other obligations that are required to obtain a home loan (for example, a fire insurance policy).
To help you on your way, we have made an overview of various loans and credits that you can compare yourself. You can find this overview here .
Choose fixed interest or variable interest?
Be smart in your choice when choosing the interest rate of a loan. When interest rates are historically low, it is wise to opt for a fixed interest rate. In that case, the chance of an interest rate increase is much greater than a further rate cut. In a period of 20 years or 30 years, the cost is high when the choice is wrong.
Refinance if interesting
If you already have a mortgage loan, you might benefit from refinancing this loan. The interest rate should drop by about 1% before refinancing seems interesting.
It is therefore not a bad idea to check annually to what extent the interest rate has evolved and to what extent you can benefit from this. You are not tied to your current bank, but you can also refinance at another bank. Who knows, are they able to put a better proposal on the table?
Duration of the loan
Regardless of which type of loan you wish to apply for, the term of the loan is also an important element to take into account. The longer the term, the more interest you will usually pay.
In other words, you choose the term depending on your repayment capacity, but also on the basis of the terms of the loan: do not take too long a term if it can also be done in a shorter period of time.
Borrowing versus House charge.
If you buy a property, your monthly repayments are not your only costs. Take this into account! In addition to the loan, you also have various costs such as the various taxes and withholding taxes and the maintenance of your home. It is therefore important not to borrow too much but to know what your limits are.
Insurance guaranteed living.
There is no reason not to take out insurance for guaranteed wages, because this is free. An insurance guaranteed home protects you if you can no longer repay your mortgage loan.