Maximum loan down in 2020.

Thanks to new standards and an adapted calculation, you can now borrow less

Thanks to new standards and an adapted calculation, you can now borrow less

As of 1 January 2020, new loan standards for 2020 have been published by the Association of Financing Companies in the Netherlands (VFN). The VFN loan standards serve as the basis for the maximum loan calculation that many parties in the credit market use. The calculation on this website is also based on these standards. To be clear, this is the calculation of the maximum loan and not the maximum mortgage.

The standard amounts change regularly, but this time the calculation itself has also been adjusted. These adjustments are a result of measures taken by the AFM supervisor to force the parties on the loan market to do more to prevent over-crediting. The consequence of the adjustments is that less can be borrowed in 2020 than in 2019.

Calculate the maximum loan with the 2020 standards.

Adjustment calculation

Adjustment calculation

The calculation itself has therefore been adjusted. We do not discuss the calculation itself in detail here (an explanation of the calculation can be found here), but the most important adjustment is that a surcharge has been added to the calculation of the loan standard.

Loan standard = (basic standard) + (15% * (net income – / – standard of housing load – / – basic standard)) + storage

The amount of this surcharge depends on the household type of the applicant for the loan. The following surcharges currently apply to the four different household types:

  • Single: $ 40
  • Single with children: $ 226
  • Living together / married: $ 119
  • Living together / married with children: $ 244

By adding this extra surcharge, the budget that someone who wants to apply for a loan can use to spend on a loan has decreased. This automatically leads to a lower maximum loan amount. Especially for people with children, the amount that can be borrowed in 2020 can be considerably lower than in 2019.

Adjustment of loan standards

Adjustment of loan standards

In addition to the adjustment of the calculation, the loan standards have also been adjusted. This happens regularly. These adjustments also mean that the maximum loan in 2020 will be somewhat lower on average.

For completeness, see below an overview of the old standards (valid from June 2018). You can find the most recent standards here.

Top 5 tips to save on a loan

 

Borrow cheaper money with smart tips

Borrowing money costs money – we all know that. Even if the interest rate is 0%, a lender must state that borrowing money costs money, if only to make people aware that a loan should not be a habit. Anyway, if you still have a loan or need to borrow money, then of course preferably as cheap as possible. Starbuck gives you tips for cheaper borrowing!

Borrow cheaper money with smart tips

1. Compare loans properly

There are still plenty of people who just go to their bank and apply for a loan there. Not smart: it is often much cheaper to arrange online. The interest at the bank is often higher than what is possible elsewhere. That is not surprising: those bank branches and all that staff also have to be financed from something. Fortunately, comparing loans online is not difficult: here on Starbuck we help you with a clear and fair comparison.

Compare loans directly

2. Do not borrow via the webshop or mail-order company

2. Do not borrow via the webshop or mail-order company

Those who make a purchase in the large webshop – the modern version of the former mail-order companies – can often easily do this on credit. That is no effort and seems interesting due to a low monthly amount. However, look a little further and you will see that there is a very high-interest rate incorporated in those monthly payments. Just calculate what you pay in total (the monthly amount x the number of months) for your purchase!

3. Set the running time as short as possible

It is also smart with a regular personal loan to keep the term as short as possible. Of course, the associated monthly charge must be payable, but the shorter the term, the less you pay in total for your loan. A higher monthly amount means faster repayments and therefore less interest on the whole.

4. Prevent overdraft on your payment account

4. Prevent overdraft on your payment account

Not everyone realizes it, but overdraft on your checking account is also borrowing money. For that form of borrowing, you pay a substantial interest to your bank. In addition, there is a difference in interest between ‘permissible’ and ‘illicit’ overdraft. You can be overdrawn within the limit that you have previously agreed with your bank – so that is permitted. If you are redder than agreed, it is illegal and you pay a significantly higher interest rate.

5. Keep comparing with current loan

5. Keep comparing with current loan

If you have taken out a loan, well compared, lowest interest … are you ready? In itself, you can keep that loan until it has been fully repaid. It can only be fine that interest rates fall over time, making new loans even cheaper. Then it can be interesting to transfer your current loan to a new one.

Check for penalty-free repayments

Therefore, check when taking out your loan whether you can repay it without penalty. That’s great anyway: if you win a lottery or suddenly get a large amount at your disposal through something else … then the first thing you want to do is, of course, pay off your loan. Without penalty. An additional advantage is that you can also switch to another lender without a fine. Then you can take advantage of the decreased interest!

What consequences can arise when we do not pay back the loan on time?

Online loans no longer surprise anyone – most of us take out loans to finance a specific purpose, e.g. purchase of an apartment, car or holiday trip. As such services on the current market are not difficult. Banks and financial institutions are outdoing each other in seeking customer interest.

And if everything is tailored so that the customer uses the offer as soon as possible, then often there are various difficulties in settling the receivables, and this has far-reaching unpleasant consequences. What can threaten the client for failing to pay the loan on time and how to avoid it?

Reading the contract and asking questions

Reading the contract and asking questions

Taking out a loan is now extremely easy – in many cases, it is enough to have access to a computer and the Internet. Then complete the simple form and mark the documents as “read”. This is the most common mistake customers make.

As they do not even get acquainted with the content of the agreement, which they agree to.

To consciously manage your own finances and make a loan, which is a serious commitment, you must carefully read both the contract and all attachments. It is crucial to know what we agree to when we take on debt.

What if we don’t pay back on time?

What if we don

Late repayment of the loan within the set deadlines can cause a number of serious consequences that we will suffer very painfully in our portfolio. Especially that parabanks or financial institutions offering so-called Payday loans, at the same time, pay very high interest in their services, as they bear high financial risk.

Then, after a short period of time, after a maximum of several months, the amount must be paid in accordance with the contract within the prescribed period. Otherwise, you can get into big financial trouble. Finally, to the loan amount to be paid back, interest is often added, which is several hundred percents, or even more than the debt was initially equal. Such problems most often affect people who assess their creditworthiness and, above all, their options, poorly.

When, after two or three months, it is time to pay off several thousand zlotys of debt and the monthly income is e.g. USD 2,000, then there is panic and borrowing more money to settle the debt. Then it is very easy to fall into big financial problems and a vicious circle of debts, from which it is difficult to get out. That is why it is so important to know exactly the terms of your debt and the possible consequences of default.

What about large loans?

bank

In the case of larger amounts of debt, the matter gets a little more complicated. In the case of, for example, mortgage loans, failure to pay the loan on time may even result in the house being taken back by the bank and putting it up for auction to recover money.

It is, therefore, a very unfavorable situation in which no one would want to be found. It is therefore worth being aware of the responsibility for timely payment of installments. To avoid unpleasant surprises, which we agree with the contract.