Historically low interest rates mean that the credit market for home buyers is currently very favorable. But even in today’s flexible mortgage market it is not always easy to take out a home loan, even if all income requirements are met. Banks simply do not like what they themselves define as ‘risk groups’. And whoever is a part of it often realizes it only when he or she wants to take out a loan. But what strategies can an aspiring residential buyer use if the bank does not want to borrow? We look at four popular tactics to bypass (or change) the bank manager.
The criteria to determine whether someone is creditworthy.
The criteria that banks use to determine whether someone is creditworthy enough to be able to take out a residential loan (or mortgage) often seem incomprehensible, especially for those who see their loan application refused. Banks do not only pay attention to the current income of prospective borrowers, but they include all sorts of criteria in their consideration to determine the risk that a loan will not be repaid.
It all sounds very easy. Just take out a loan from the bank because you want to purchase a new car or finance a long trip. After signing your application, you sign a loan agreement and the amount will be on your account in the shortest possible time. But maybe it does not run exactly the way you want. What are your rights in a loan agreement?
Each borrower is protected as a consumer by a number of statutory provisions. These allow you to collect information, to take a cooling-off period, to change your opinion about the loan agreement or even to repay your loan earlier.
More than 6.2 million Belgians had a credit facility open in May 2016, according to the National Bank of Belgium. In this way they finance their own projects and expenses. For some, however, a credit is a source of concern: they are afraid of the financial instability or the debt spiral that could bring debts.
Here are 4 reasons never to say to a loan.
- Personal loans, loans with a specific purpose and mortgage loans are the best options to borrow in the short or long term
Personal loans and loans for specific purposes (car loans, renovation loans, …) can be a good alternative for credit cards to borrow money. These are types of loans that offer the lowest interest rates; it is cheaper than the use of a credit card or another credit outlet. In addition, your monthly payments are fixed, so you know in advance what you will pay, and you will not be surprised.