The consumer credit is a type of loan granted by a bank or financial institution to a private person to finance the purchase of a good or service. Thanks to the credit, the borrower can finance consumer goods and his / her private expenses. The consumer credit is granted to physical persons ; companies and non-profit organizations are therefore not eligible. Private individuals may not use the credit to pay for a project in the context of a professional activity. If the purchased product is mainly used for personal purposes, the credit is nevertheless considered as consumer credit.
For example: you are a dealer and you buy a new car that you only occasionally use to deliver goods; you use the car mainly to drive from your home to work. The credit will be considered as a consumer credit.
I urgently need a loan due to unforeseen expenses. What should I do?
What are the different forms of consumer credit in Belgium?
The personal loan
This involves a loan of € 500 to € 150,000 to finance a personal project, such as the purchase of a new boiler or a second car or to pay for your volunteer trip to Mali. The rates applicable to a consumer credit in Belgium vary between 5.2% and 10% depending on the amount, the duration and the financial institution. In the context of a personal loan, the borrower does not have to justify his purchases and he / she is free to spend the money. To find out more about how loans work in Belgium, don’t hesitate to view our loan guide.
The installment sale
Financing rent or leasing
A finance lease is a lease with the option to purchase the property through monthly lump sum payments. At the end of the contract it is possible to buy the property at a predetermined price. For example, with some leasing contracts it is possible for motorists to acquire the vehicle on the expiration date of the contract.
The bridging loan
The bridging credit is an atypical credit to the extent that it is an advance that must be repaid in one go. The credit is granted to a private individual who expects a large sum of money in the future and usually occurs in the context of the sale of a house aimed at the purchase of a new residence. Getting the house sold and receiving the money from the sale can take some time. In the meantime, it is possible to use the bridging loan to pay for the new home. The credit will be repaid in one go thanks to the money from the sale of the first home.
The permitted debit balance on an account
It is possible to request a permitted debit balance linked to your current account. This gives you the ability to respond quickly to unexpected expenses. The limit will depend on the account and the chosen financial institution, which means that you should inform your bank well if you consider this option. Keep in mind that if you exceed the limit, you will have to pay extra costs that may be very expensive for you.
This type of consumer credit also requires that you be involved in your own finances: an account that is constantly in the red gives a certain image to your bank that you can play tricks in the future.
The opening of a credit line using a credit card
Thanks to a credit card it is possible to open a credit line, also called renewable credit. The principle is simple: depending on the chosen card, you enjoy a cash reserve that you can continue to make endless use of on condition that you pay a minimum monthly amount. If not, interest is involved. It can be a practical solution if a financial problem arises, but only works as a timely parachute : you have to repay the minimum amount every month.
What can I buy with a consumer credit?
Can I finance a house or apartment with a consumer credit?
What are the benefits of a consumer credit?
What are the disadvantages of a consumer credit?
How should I choose my consumer credit?
What steps do I have to go through to apply for consumer credit?
- you must be at least 18 years old;
- you must be a resident in Belgium;
- you must have regular income and you must not be listed on the blacklist of the Central Individual Credit Register.
If you are listed on the blacklist of the Central Individual Credit Register, consult our blog article to find out more about your options.
Ultimately, the financial institution will ask for your income and credit history to evaluate your creditworthiness and repayment capacity. Know that different banks work with different requirements and that your credit application may be refused at one bank but may be accepted at the other. So do not hesitate to compare loans and do not give up if your credit application is initially rejected.