5 Items that determine the Maximum Amount of your Car Loan

Most people who choose to buy a car make the conscious choice to apply for a car credit .

The conclusion of such a loan is interesting, not least because a car is labeled as ‘lost capital’. This means that by definition they always decrease in value, at least until the moment that they are labeled as old-timer or collectors item. Before going to the bank or another lender, it is important to take into account that different aspects influence the (maximum) height of your car loan. Learn about how the PurplePayday title loan process works.

1.) The purchase price of the vehicle in question

At first there is of course the cost price of the car you wish to purchase. A structural distinction is made between private individuals and companies. For private individuals, for example, they can borrow the full amount including VAT in almost all cases. With various lenders, it is even possible to opt for financing of 110 percent of the purchase price. In this way, the borrower has a little extra margin, so that he does not get into trouble right away in the event of a temporary dip in his or her financial situation.

For companies, the above is not relevant. They can usually borrow up to 100 percent of the purchase price and then still exclude VAT. This has everything to do with the fact that the borrower can recover the VAT amount via the VAT return. In principle, this does not immediately constitute a problem, although this does mean that the borrower must first advance the VAT. In particular when it comes to a new management car, this amount may well turn out to be quite high. For companies, this is certainly something to take into account.

2.) The repayment capacity that you have

A loan and more specifically the amount that you can pay monthly can only be as high as your actual repayment capacity. This is a very important, limiting factor. This is not the case in the least because it also takes into account any other payments or debts that already exist. In addition, the other fixed costs, such as the rent of your house as well as electricity, gas and water are included in the calculation. It is mainly the repayment capacity that ensures that many people can not buy their dream car until their great sadness.

3.) The duration of the credit agreement

You as a borrower determine the repayment term of your car loan in general terms. In practice it is true that the bank can impose certain limits. For example, there is the difference in the maximum repayment period between a new and a second-hand car. In the latter case, the age of the vehicle in particular is of decisive importance. The choice of the term of the credit agreement will in any case have an effect on various factors. It therefore not only exerts an influence on the monthly ‘financial margin’ that you have, it will also always have an impact on the cost of your financing. The longer the installment of your car runs, the lower the monthly amount owed, but the higher the costs will be at the end of the journey.

4.) The statutory maximum

In point 3 of this blog article we have already indicated, you as a borrower can not just freely determine which repayment period you use for your car loan. The bank, but also the law has a certain influence on this. From a legal point of view, various maximum repayment terms have been determined, namely:

  • A credit amount of between € 2,700 and € 3,700 must be repaid within 30 months;
  • A credit amount of between € 7,500 and € 10,000 must be repaid within 48 months;
  • A credit amount of between 10,000 & 15,000 euros must be paid back within 60 months;
  • A credit amount of between € 15,000 and € 20,000 must be repaid within 84 months;

In practice, it often happens that the bank uses a slightly more strict payment period. This especially in second-hand cars. After all, their value may already have fallen sharply after a few years, as a result of which they offer insufficient guarantees for any problems related to the repayment of the credit.

5.) Your own financial history

Finally, the provision of each loan now also looks at the personal, financial history. Not least at the bank in question. For example, did you sometimes have to deal with a red balance that you did not receive in time? Or were there problems with paying off a loan in the past? In that case, you can be assured that the bank will be much more cautious about awarding a new loan. This can ultimately significantly affect your financing options. The reverse is of course also applicable. Are you a loyal customer with your bank or other lender and have there never been payment problems? Then she will welcome you (back) with open arms!

Borrow Money? 5 Important Tips

Borrowing money is now easier than ever.

Many people may not agree with this because banks and other lenders have become much stricter than before.

That is true, but on the other hand, the supply of credit forms has increased considerably. Moreover, nowadays you can simply submit a credit application from home where this was of course not possible in the past. The enormous range of opportunities to borrow money has as a direct consequence that we also do it much more often, even when it is actually not necessary at all. Are you planning to borrow money, but do you want to be sure that you do it in a truly responsible way? In that case it is certainly important to take into account the five important tips from this blog article.

Tip 1: Only borrow when that is interesting

It is good that different types of credit can be found on the financial market. If there are no possibilities to finance a large purchase or investment, it would be impossible for many people to buy a car or a house, for example. Despite the fact that a car is basically lost capital (your investment theoretically declines every day in value to often never rise again), taking out a car loan is definitely worth it. This way you do not have to touch your hard-earned savings while you still have the opportunity to purchase a truly qualitative and beautiful-looking car.

The above is of course not only valid for the purchase of a car, but also for real estate. Almost no one in Belgium has the opportunity to buy a house or apartment for 100% with own resources. Moreover, it can be established that people who may have this option may still take out a mortgage loan. How did that happen? Very simple. It is never a good idea to put your entire available capital in one big investment, even when it concerns real estate. In addition, there is also the residential bonus that ensures that people who take out a mortgage loan can count on an attractive tax benefit.

The above makes it clear that in various situations it is certainly worthwhile to take out a loan. On the other hand, it is often not at all. For example, what about the moment when people choose to buy three televisions to spread over their homes and they take out a consumer credit for that? In this way you have the possibility to get your three desired television sets, but an interesting investment is this in the least.

Tip 2: Prepare for yourself what amount you can pay monthly

Banks today are very strict in determining the repayment capacity available to their clients. This does not detract from the fact that it is also important for you to determine how much money you can miss each month, regardless of your potential lender. In doing so, several factors must be taken into account, namely:

  1. Any rent that needs to be paid;
  2. The fixed costs in the form of gas, electricity and water;
  3. Possible current savings contracts and / or insurances with fixed costs;
  4. Other existing credits or debts;
  5. The required reserve for paying other costs such as groceries;

By taking into account the above five factors, it is already possible to decide for yourself how high or how low your monthly repayment capacity is. However, preferably keep an extra margin, because unforeseen events can always arise. Is that the case? Then you will want to have a little savings on hand to also be able to pay these costs.

Tip 3: Do not borrow more than necessary

The third tip is also a very important one. The fact that you might be able to borrow more

then you need it strictly speaking does not necessarily mean that this is also interesting, on the contrary. It is indeed correct that you have to make sure that you have some extra financial breathing space yourself, but borrowing more money always means paying higher costs. Therefore, try to decide for yourself how much financial margin is required for your purchase or investment. Please note that in most cases it is only possible to borrow a maximum of 100% when investing in a new car in particular.

Tip 4: Use a short, but feasible repayment term

The repayment term of your loan is decisive for the final costs you will have to pay, but also for the payment comfort you have. In practice, a short installment period will always ensure that your loan is accompanied by the lowest possible costs. On the other hand, you will have to pay a considerable amount every month again. Does something go wrong and you have not kept a sufficient margin for your payments? Then you can immediately be confronted with a lot of extra costs. As a result, your credit will become a lot more expensive in one go than if you had just opted for a slightly longer installment.

Tip 5: Compare credits with different providers!

Before closing a loan, it is always a good idea to compare the various options and the associated costs with various lenders. You have to provide a little bit of time for it, but at the end of the ride you will be able to determine that you can save a lot of money.

Borrow money to buy land? Take this into account!

Buying land for building a new home may have become a lot less popular over the years, yet this does not take away the fact that today many people still prefer it.

 

When you choose to proceed with the purchase of building land, the chances are that you want to choose to borrow for this purchase as much as possible so that you have to take out less credit for the construction of the house. Is that interesting, however? A loan that is taken out for the purchase of land is not eligible for the home bonus. You will learn all about it in this interesting blog article!

Is borrowing for building land actually possible?

In the first instance, the question remains with many (rightly) whether it is or is not possible to borrow money for building land. In principle, it is possible to take out a mortgage loan for the purchase of building land. However, the fact that it can not mean that it is simple, on the contrary. In practice, it is often the case that banks are not exactly jumping for the granting of a mortgage loan with regard to the purchase of building land. How did that happen? Very simple. In the first instance, in this way only very limited guarantees can be provided by the borrower. That is different when it concerns a house, because then there is the right of pledge. This is much more complex with building plots. An additional disadvantage is that the people who already borrow for the purchase of building land can no longer receive additional financing for realizing the actual home.

What are the tax consequences?

In 2017, just under 10 percent of all loan applications for building land were expected to be approved. That is of course very little. In addition, it can also be established that the number of loan applications to borrow money for the purchase of building land has decreased considerably over the years. Here are causes for indicating, namely:

  1. More and more young people are choosing to purchase an existing home and renovate it;
  2. The fact that no claim can be made on the fiscally interesting housing bonus;

At the moment that you would like to borrow money for the purchase of building land, you should always take into account the financial consequences that this choice entails. An important point, for example, is the fact that by taking out a loan for the purchase of land, you are not eligible for the home bonus. That is of course the case when you purchase a home.

No living bonus when borrowing for building land

Just because there is no claim to the home bonus when a mortgage loan is taken out for the purchase of building land, the general advice is that you would do well to limit the credit amount for the purchase of building land to a minimum. . That is also not surprising, because the home bonus is good for a tax reduction of 40 percent on the purchase of a house on what interest, capital or debt balance insurance is paid. The maximum amount of this tax benefit is limited to 2,360 euros. In principle, this means that you can pay up to 944 euros less in taxes on an annual basis.

Added value tax on the sale of building land

Not only the less favorable tax conditions for borrowing money for building land are important to keep in mind. What about also the possible added value tax on the possible sale of your building land in the future? When you buy the building land separately and you sell it back after 8 years you can
face an (extra) painful load. The first 5 years there is a tax rate of 33 percent while it is in the next 3 years at 16.50 percent.

Conclusion; borrow money for building land or not?

After reading the information in this blog article, it should be clear that borrowing money for the purchase of building land is actually not interesting at all for practical reasons. In essence, you are already missing a lot of money because you do not have the possibility to deduct part of the interest on your mortgage loan from your taxes. In addition, at the moment that you may want to sell your building land back in the future, that can ensure that you have to pay a capital gain tax. This way you will not suffer a single financial loss, but only twice.

Apart from the above, it must also always be taken into account that if you already receive the mortgage loan for your building land, the chances are that you will no longer be able to borrow for the realization of your house on the building site in question. For both purchases you will have to be able to provide not inconsiderable income guarantees. All in all, it is therefore more interesting to bring in as much of your own resources as possible when purchasing building land. For example, you may be able to take out a mortgage loan without any worries for the realization of the actual home.

Belgians borrow most often for home and car

It is known that Belgians generally do not have so many problems with borrowing money.

At the end of July of this year was announced by the Central for Loans to Private Individuals that just 6.3 million Belgians in Belgium have at least one credit.

In addition, it also came to light that many Belgians also have multiple loans. In total there were just 11.2 million in outstanding loans. In particular, loans are made for the purchase of a home and a car, although borrowing is increasingly being done for less ‘necessary’ matters.  

  3.1 million current residential loans  

The most recent figures indicate that at that time there were 3.1 million in current housing loans. In addition, there would also be 8.1 million of so-called consumer credits. These latter credits are becoming increasingly popular and are used to finance less substantial purchases. Moreover, when the range of consumer credits is viewed closer, it can also be established that different forms exist. The best known, however, is still the regular consumer credit on payment. Of this, about 2 million would exist.  

  A consumer credit can now be closed in several ways. When this is concluded with a traditional bank, this means in practice that a certain amount of money is paid out to the borrower, who can then spend it at his own discretion. On the other hand, it is also possible that the credit broker is also the seller of the article in question. The latter is the case, for example, when a large, expensive television is purchased on payment at a retail chain. Of the latter so-called ‘sales on payment’ there would currently be about 195,000.  

 Credit opening by far the most popular consumer credit  

If the consumer credit figures are looked at closely, it can also be immediately established that the so-called ‘credit opening’ is the most popular consumer credit. At the end of July there were about 5.9 million contracts of this type of loan. That this type of consumer credit is so popular is undoubtedly due in part to the flexible character it possesses. The credit card then makes it possible to go ‘in the red’ on the current account that is linked to the card in question. This of course seems very simple, but here too certain costs or interest are charged.  

  What exactly are Belgians borrowing for?  

When evaluating the credit institution’s figures, it immediately becomes clear how many outstanding credits there are in our country, but it does mean that nothing is really said about the purpose for which people have taken out the credits in question. For this reason, similar research was conducted earlier this year by Wikifin, the educational arm of the financial watchdog FSMA. The research actually consisted of a poll that was organized among a thousand Belgians according to their credit behavior. One of the questions related in particular to the type of loan taken out by the persons in question.  

  The research revealed that the residential loan is by far the most popular form of credit. 49 percent of the respondents had therefore borrowed money for the purchase of a home. The car loan takes up an equally important 37 percent. In addition, it became apparent that more and more people are also choosing to borrow for energy-saving investments (around 6 percent), as well as buying new furniture and even an expensive television (6 and 5 percent). It is also striking that 1 percent had already taken out a loan to organize a large and expensive party. 2 percent would also have borrowed for buying an engine. In order to be able to pay the taxes, it is increasingly being decided to take out a loan.  

Interest-free loan for rental guarantee approved

Increasing the rent guarantee from two to three months is a proposal that has been on the table for some time.

Nevertheless, several parties stated that they would not just agree with this. One of the most important parties that could not just give approval was CD & V. They found that increasing the amount for the rent guarantee from two to three months could make it considerably more difficult for (young) tenants to still pay the deposit + the first month’s rent. To solve this problem, CD & V proposed to offer an interest-free loan to (new) tenants. In this way it had to be financially easy for them to still be able to pay the rent guarantee and the first month’s rent.

Higher guarantee for tenants

The higher rental guarantee would be a requirement because the cost of rental damage and non-payment now made often mean a significant loss for landlords. That said, the higher guarantee obviously increases the threshold for tenants. They must now no longer take into account two months’ rent as a guarantee, but three at the conclusion of a new lease. In addition, the first month rent must also be paid on top of that. Especially when a larger home is rented, this can be too high for many people financially. Partly for this reason, an interest-free loan for paying the rental guarantee could be a good idea.

Anonymous interest-free loan

In order to be able to solve the higher financial requirement, an interest-free loan combined with a smooth procedure seems to offer the solution. A procedure that is as efficient as possible is a requirement because tenants may otherwise run the risk of still seeing their desired rental property pass by. In order to prevent such a situation, it is possible for potential tenants to request a prior approval of their lease guarantee credit in advance. In practice, this ensures that tenants can already have the amount of the loan in their bank account within three days.

Conditions for taking out interest-free loan for rental guarantee

As to the exact conditions that you as a borrower will have to meet to obtain the interest-free loan for a rental guarantee, not much is known so far. However, it is certain that the basic conditions will be similar to another specific credit that would be taken out. In concrete terms, therefore, two points must be taken into account:

    1. It must be demonstrated that the borrowed amount can be repaid;
    2. It must be clearly demonstrated that the loan is actually taken out to pay the required rental guarantee;
    3. The amount of the loan must be repaid within 2 years (with a possible extension of 6 months);

The fact that more and more new tenants will have to take out a loan for their rental guarantee seems a bit annoying at first sight, but in practice this does not have to be a disadvantage at all. The fact that this concerns an interest-free loan that does not involve any costs ensures that no account should be taken of any financial disadvantage, on the contrary.

Extra important condition for obtaining interest-free loans

The conditions stated above are in principle fairly standard for the moment when a certain funding is requested. Yet there is another condition that needs to be taken into account. This concerns the fact that the tenant who applies for the interest-free loan may not own a certain property. Is that the case? Then it is no longer a possibility to apply for this loan. At first glance this does not seem to be a problem at first sight, but what about people who, for example, have partially become owners of a house from an inheritance? They usually do not receive income from this, but they can not take out the interest-free loan. This is certainly something to keep in mind.

How to apply for the rental guarantee loan?

The new lease rules will take effect from 1 January 2019. From this moment on, it will therefore also be possible to apply for the lease guarantee loan. This is an anonymous and interest-free loan that in principle must be able to be taken out by all potential tenants. Applying for the loan must take place. The tenant must also take into account that the amount provided must be repaid within 2 years. However, in practice six months of space seems to be possible.

Borrow money for your Holiday? Keep in mind!

In recent years, it has already been established among all lenders that more and more people choose to borrow for their holidays.

This has everything to do with the fact that people spend more and more money on the trips they plan. Moreover, it has also been established in recent years that the Belgian is increasingly going on holiday more often and above all. We also leave the car at home more and more, which means that the demand for flight holidays has increased considerably. Are you also planning to book a nice holiday and would you like to borrow money? Then there are a number of important factors that you will want to take into account in the first instance.

Can you borrow money for a holiday with every form of credit?

At first it is important to keep in mind that you can not just apply for a loan with every form of credit for booking a holiday. This has to a large extent to do with the fact that very specific conditions are attached to different loans. A classic example is the renovation credit (not that you will want to close it for booking a holiday, but that aside). With this form of credit, payments are only made on the basis of invoices that can be submitted. In concrete terms, this means that the purpose of the financing has been established and can not be deviated from. Do you want to borrow money for your holiday?? Then you will mainly want to look in the direction of a personal loan or a cash credit.

How much money do you want to borrow for your holiday?

Well, by using a personal loan, would you in principle be able to borrow money for your upcoming holiday? In principle, however. Of course, the conditions that personal credits hold are always dependent on the lender in question. This means that it is not inconceivable that a holiday is not accepted by every lender. Checking the conditions carefully is always recommended. Is it reflected that you can just borrow money for your upcoming trip? In that case, you can look at the amount that you need.

The total amount of your holiday is always made up of several parts. Most people who want to finance their holiday only take into account the amount of their stay. That is of course no problem, but what about the transport? Are you going by car? Do you want the costs for your petrol to be borrowed? Have you, on the other hand, booked an individual flight? You may also want to take this into account. In addition, there are also the costs on the spot. Many people only go on holiday once a year, but do not want to be denied anything at all. Does that also apply to you? Then you may also think about including a certain amount for your credit application on the spot.

How much money can you borrow for your holiday?

There is obviously a big difference between the money you want to ‘borrow’ for your holiday and the money that you can actually ‘borrow’. A holiday is never regarded by a lender as a valuable investment with potential. The reason for this speaks for itself. In fact, every holiday that is booked is a bit of lost capital. However, you get a lot of rest and relaxation in its place. In any case, the lender will always look fairly strictly at the options available to you to repay the loan. It is partly for this reason that attention is paid to, for example, any credits already running. In principle, when granting a loan for your holiday, attention is paid to:

  1. The current credits for which you are still paying off;
  2. The net income that you have available;
  3. Other fixed costs (such as investments, etc.) that have to be paid;

Only and only the amount that you actually have after paying all the above costs will you still be able to use to pay your holiday loan. Does it appear that too little funding is available according to the lender? In that case, it does not necessarily mean that the chance is very high that your holiday loan will be refused.

Withdraw money for your vacation from a cash credit

A second option outside the personal loan is to withdraw money from a cash credit or, for example, a money reserve . Such forms of financing make it possible for you to withdraw money at your own discretion without having to account for exactly what the sums are used for. Even if you want to plan a holiday in other words, such possibilities can provide you with additional financial resources. Mind you, you have to take into account that such possibilities are always (much) more expensive compared to a personal credit.

Is money borrowing for a holiday wise?

Finally, there is the question whether or not it is wise to borrow money for a holiday. The majority of people will agree that this is not the case with a survey. Nevertheless, it has to be established that borrowing money for a holiday has become more systematically popular in recent years. This has everything to do with the low interest rates as well as the fact that people do not like to call their savings to go on holiday. Whether or not it is wise to borrow money for paying a trip is a bit personal. Everyone deserves to be able to take time for themselves and to relax in a hectic year. For many people, a holiday is absolutely necessary, but due to slightly limited financial possibilities, this can just pass by. Taking out a loan can then be a very interesting alternative.

From when are you too old to borrow money?

More and more people are choosing to purchase a new home at a later age.

That does not seem to be such a problem at first sight, until you visit the bank. From the age of 60 it is perfectly possible that obtaining a home loan.is made considerably more difficult. Does this mean that in practice you can better put your dream to get hold of a dream home in the freezer? We will gladly go into it and tell you all about it in this interesting blog article.

The life expectancy of the borrower

One of the perhaps most important factors that a bank takes into account when issuing a credit is the life expectancy of the borrower (s). However, there are no general rules for this. This is expressed in practice under very different conditions. For example, Argenta is a bank that prefers to see a home loan repaid by the age of 70. At BNP Paribas Fortis this limit is a bit lower. The youngest borrower may be up to 67 years old. The reasoning behind this, however, may not be the one you think. For a bank, however, it is important that the borrower is a wage-earner. From the age of 67, the borrower is by definition no longer because he or she has reached the status of pensioner.

By the way, not every bank chooses to use an age limit for providing their loans. In particular, KBC & Belfius major banks, for example, have already indicated that they are not so much adopting a fixed maximum age for whether or not to grant their loans. Naturally, they determine the potential approval of their credit files on the basis of criteria drawn up by them. Indirectly, the age of the borrower can therefore play an absolutely significant role in this.

What about the debt balance insurance?

The above makes it clear that it is absolutely not correct that a person in later life can automatically no longer take out a home loan. But it is true that there are some times to the medal. An important and often decisive factor in whether or not a (residential) credit is granted are the guarantees that are in return. Especially with borrowers who are a bit older, they look at these guarantees with a magnifying glass. Are they insufficient and is the risk for the lender too large? Then it is still possible that you run into a refusal of your credit application. It must be said, however, that this applies not only to the older, but certainly also to the young (er) borrowers.

An extra point to keep standing still when taking out a home loan later in life can be found in the form of the cost of the debt balance insurance. The premium that is charged for this is largely geared to the life characteristics of the borrower. This not only concerns his general health or lifestyle, but also, for example, the risk of death during the payment period. For seniors, this risk is obviously higher compared to 25-year-olds, which will always have an impact on the costs to be paid.

Is there perhaps also a minimum age?

A formal maximum age is therefore not used by banks nowadays, does this also apply to the minimum age at which you can take out a loan? Unfortunately not. The law says that every person who wishes to take out a loan must be legally competent. These are, of course, difficult words to indicate that a borrower must always have reached the age of 18 years. In principle, it would be possible to circumvent this law, but this requires a substantial procedure which actually has little chance of success in practice. Moreover, it goes without saying that in this situation, the bank will also be looking explicitly at the repayment possibilities of the loan in question.

What about the income of an older borrower?

Throughout this article we have indicated several times that the chance of success of a credit application at a later age is not seldom dependent on the income that is available. It goes without saying that the bank always wants to have the best possible security with regard to the repayment possibilities of the financing provided. Is income no longer available, for example because you have already taken early retirement or because, for example, you became unemployed due to circumstances? In that case, other guarantees will have to be provided in order to be able to prove the repayment capacity of the loan in question. In any case, the assumption that it is no longer possible for elderly people to take out a loan is in practice absolutely not correct. However, it is necessary to prepare well and of course take into account the conditions of the bank in question.

The impact of a second loan on your first home loan

If you would like to take out a loan for the purchase of a second home, it is possible without any problem to call on another bank.

This is also the case when the first loan has not yet been paid at that time. The only risk you run in this situation is that you will lose a part of the tax benefit of the first loan. That is, however, insurmountable, because you also had the same problem with the same bank.

The character of a mortgage

A mortgage must be provided because it offers a bank the opportunity to sell a property when the borrower (and thus owner) can no longer meet his financial obligations. The proceeds that the bank obtains through this sale can then be used to pay the outstanding loan. In practice, a mortgage is always linked to a concrete property. It makes no difference in that respect whether the loan has now been taken out for the building in question or for another copy. It is therefore perfectly possible to borrow for a home and as a guarantee to have the mortgage established or to subscribe to another property.

The above also means that in practice it is perfectly possible to have more than one mortgage established on the same property. The bank that comes first then has a mortgage in ‘first grade’. The bank that comes next has one in second rank, then in third grade and so on. The first bank will be fully paid first when there is a forced execution. Then follows the second bank, then the third. Naturally, this ensures in practice that the first bank always has the strongest guarantee.

Taking out a second mortgage

Do you already have a mortgage, but do you also plan to have the purchase of a second home financed? In that case, you have two different options. For example, you can have a mortgage in first grade on the new building, but you can also place a mortgage in second rank on the first house you have purchased. In the latter case, however, the bank will first conduct an investigation into whether the value of the house in question is sufficient to carry two mortgages. In addition, it is also possible that you are confronted with a higher rate. A real additional interest may be 0.25 or 0.50 percent.

Whether you choose to take out the second mortgage with the same bank or with another financial party does not make much difference in practice. In both cases it goes without saying that the party in question will investigate whether you have the necessary financial means to be able to repay the loan. For example, is sufficient income available to be able to pay off the loan and can sufficient guarantees be given in case of unexpected failure? They are certainly also factors that you would like to keep silent about.

The tax benefit on the first home./h2>

Tax matters are slightly different. For the property that you occupy as owner yourself, the right to a so-called home bonus of 1,520 euros applies in Flanders. During the first ten years, an amount of 760 euros will also be added, but only when it concerns your first home. Do you have at least three dependent children? Then another 80 euros will be added. In this way, the maximum tax benefit amounts to a sloppy 2,360 euros per person. The residential bonus ultimately provides for a tax reduction of 40 percent.

What about the tax benefit on the second home?

Is there a second home that you do not want to live in yourself in other words? In that case, there is no entitlement to a home bonus, but a substantial federal tax reduction. This is set at 30 percent and is calculated on the basis of an amount of 169.20 euros + 6 percent of the net taxable professional income. The global maximum is 2,310 euros. In the best possible case this means a saving of taxes of a beautiful 693 euros.

Limited loss when buying a second home

Lastly, keep in mind that there is a limited loss when you buy a second home. This is because you are no longer entitled to the increase of 760 euros for the Flemish home bonus for the first home. As stated earlier in this article, this only applies to the only property you own. From the moment you purchase a second property, you no longer meet this condition. In this way, the tax benefit of 760 x 40 percent (ie an amount of EUR 304) will disappear over a period of ten years.

What is the most favorable term of a Loan?

The majority of people who wish to purchase a car choose to have it financed.

That is potentially very interesting, but what exactly is the best time to pay a car credit? Is it now the most interesting to limit this term as much as possible or can a little extra breathing space (financially) do no harm? We would like to go into this in detail and we searched for you in which time you can best pay off your car loan .

Credit term depends on your personal choice

The purchase of a car can be a considerable investment. This ensures that almost everyone who wishes to buy a car chooses to have it financed by, for example, a bank or another financial institution. For which term exactly is chosen depends on several factors including not in the least your personal preference. This is because a lot of personal influences will directly and indirectly influence the amount of the monthly installment. For example, how much reserve do you currently have when you pay all fixed costs? Do you prefer to pay off your credit as soon as possible or do you prefer a longer installment?

The two options you have in principle both have their own advantages and disadvantages. Do you opt for the short pain and do you pay your car for a period of, for example, 12 or 24 months? In that case, you will be confronted with very significant monthly amounts, but it is true that the interest remains within the limits. Do you prefer to repay your loan over a longer period of 36 or 48 months? Then the monthly amounts due are suddenly much more accessible, but you will always have to pay a lot more costs at the end of the journey.

Comparison of installments of 24 & 48 months

At the time of writing it can be established that Beobank (not surprisingly) uses the sharpest interest on the market for a car loan. The interest charged by this bank is 0.65 percent . It is worthwhile to compare the costs at different maturities with each other. When we do that, it quickly becomes clear how far the costs to pay can be different. We take a purchase price of 15,000 euros for your car for this example. When we simulate these for a 24-month repayment term, we see that the monthly amount comes to 629.22 euros . Do you prefer a duration of 48 months? In that case the monthly repayment is located at 316.65 euro . With a term of 24 months , a total interest of 101.28 euros is paid. Do you still prefer a payment period of 48 months ? Then the final cost price will be € 199.20 .

Be aware of the maximum duration of your car loan

The moment you choose to apply for a car loan, you have to take into account that you can be confronted with a certain maximum duration. Have you, for example, chosen to purchase a second-hand car for an amount of 2,500 euros? In that case, the credit amount may only be repaid over a maximum period of 24 months. Is there an amount of at least 10,000 euros? Then a repayment term of a maximum of 48 months is possible. Potential borrowers who want to borrow 50,000 euros for their car can do so over a period of up to 72 months. Again, as has already been shown on this page, the maximum repayment period is often not the most interesting.

What does the bank usually advise itself?

When the banks want to give you a solid and objective advice, they usually suggest that it is advisable not to spread the repayment period of your car over an excessively long period. The majority of lenders also indicate that four years for paying a car in the average price category is optimal. In this way, the borrower usually still has sufficient financial breathing space while the costs can still be kept within limits. On the other hand, it is often in the interest of the borrower to keep the duration of a (car) financing as short as possible for the following reasons:

1. A short term guarantees you the lowest costs for your car credit;

2. Does fate happen and do you have a serious accident with your car that explains this total loss? In that case, you still owe the remaining amount of the car to the bank. Have you then opted for a considerable repayment term? Then it can be very difficult to buy a new car.

Keep in mind the difference between new & second-hand

Finally, it is still important to take into account the difference between a second-hand and a new car. Do you prefer a used vehicle? Then you will notice that the interest for such a vehicle is usually a lot higher compared to a new one. In practice, however, that does not stand out because people are mainly interested in the amount they have to pay monthly. Why do banks or other financial institutions now charge a higher interest rate for a second-hand car? Mostly because they fear that the chance is greater that they will not or will only partially see their invested money. Either way, whether you are interested in buying a second-hand or a new car, in all cases it is worthwhile to carry out a comparison between the loans with various lenders.

Taking out a private loan, a good idea or not?

At the moment you wish to take out a loan, you will immediately be able to determine that there are many different options on the market for this.

It is, however, the case that by no means all forms of credit just belong to everyone, on the contrary. Do you have a listing on the blacklist, for example? Then an ordinary bank will usually not want to provide you with a loan. In that case, however, there are still possibilities to take out a loan. The private loan is one of them. Is this credit form in practice, however, as interesting as it seems at first sight? We searched it out for you and in this blog article we have put together all the pros and cons with regard to borrowing money by means of a private loan.

What is a private loan exactly?

Undoubtedly, people will read this blog article who do not know exactly what a private loan is exactly. For these people, we will first briefly discuss this form of credit. A private loan is a type of loan that is not taken out with a bank or other financial institution . Instead, the agreement is entered into between two private parties. In practice, it often concerns friends or family members. The beauty of the private loan is that it can always be closed, as long as both parties agree on the conditions. Moreover, such a credit is often provided at very low costs or even completely free of charge.

What are the benefits associated with the private loan?

The concept of the private loan will naturally sound like music to many potential borrowers. There are indeed a lot of interesting benefits attached to it. We have selected all the advantages of the private loan for you and have placed them in the overview below.

1.) Anyone can borrow with a private loan

At first there is of course the advantage that everyone has the opportunity to borrow money by means of a private loan. This does not only apply to people who, for example, already have one or more (large) credits, which, for example, also think of those who are on the blacklist? The only thing that needs to be done to take out a private loan is to make clear agreements with the person you want to provide the loan. In other words, have you already been to different banks or other financial institutions and do not want to grant you credit for whatever reason? Then a private loan is an excellent option.

2.) Closing a private loan can be very quick

If you wish to take out an ordinary loan with a bank or another financial institution, you will always be able to determine that a not insignificant application period precedes the granting of the credit. That does not always have to be a problem, but that is when you need urgent extra money, for example. In this situation, too, a private loan can offer an excellent solution. At the moment that an agreement has been made and the person you are borrowing the money, this amount will simply be in his bank account and can in principle be paid immediately. The private loan is therefore one of the fastest forms of credit available on the market.

Deviating from the conditions is not immediately punished

In the case of various types of credit available on the financial market, it is true that, in principle, there is no or hardly any deviation. Do you do that? Then you run the risk of running into a very substantial fine. This can not only make your credit much more expensive, you can also (extra) get into the financial problems. Of course you will want to avoid both situations at any cost. By taking out a private loan, these risks are much less present. Perhaps the person with whom you have taken out the private loan does not mind that you are a few days late to pay the monthly repayment … as long as this does not happen continuously of course.

Are there any drawbacks?

The benefits described above will sound like music to many people. Many may therefore no longer be able to wait for a private loan. This is understandable, of course, but it must be said that there are also some not to be underestimated disadvantages associated with taking out a private loan. The drawbacks of this are clear on the basis of the overview below.

1.) A private loan can jeopardize your friendship

Studies have shown that just over 75 percent of all private loans are concluded between friends or family members. That is a lot. If everything goes well, that is not a problem either, but what happens when suddenly an unexpected situation arises, as a result of which you are (temporarily) unable to repay the credit amount? Or maybe the lender suddenly needs all of his financial resources, so he can recover the amount he borrowed from you early. Of course it is not very neat, but it can considerably acidify your relationship. So keep in mind that this risk exists when you take out a private loan. You do not have this risk when you simply opt for a personal loan.

2.) There is no control on solvency

The second disadvantage is also a very important one. At the moment that you take out a personal loan, a written agreement will be drawn up between both parties at most. A prior check in terms of solvency as is the case when taking out a personal loan, for example, is not available. This means that the party providing the credit is actually somewhat in the dark as regards the financial possibilities of the borrower. Needless to say, this always involves significant risks for the lender who can not be compensated or hedged.

Conclusion; is a private loan interesting or not?

In certain situations it can be absolutely interesting to take out a private loan. However, it is also important to keep in mind that there are some not inconsiderable disadvantages and risks involved. For this reason, it can still be a better choice to take out a credit with a bank or financial institution. In this way your friendship will be preserved or there will be no quarrel in the family. Moreover, the costs on credit do not have to be as high in practice as is often expected. For example, taking out a personal loan is often possible at a very interesting interest.