Do you want to realize your projects from everyday life, such as the purchase of a car or a computer? But you do not have the necessary financial resources? Just like 6.2 million Belgians, you can opt for a consumer credit. Before you do this, you need to know everything about this form of financing!
1. A credit for the consumer
Consumer credit is granted to consumers who purchase products or services for non-professional purposes. To be able to apply for a consumer credit, you must, among other things, be an adult, stay in Belgium and not be on the blacklist of the Central Individual Credit Register.
2. There are different types of consumer credit
There are 4 types of consumer credit, each adapted to different needs. We distinguish:
- The installment loan: this is an installment loan that allows you to finance all or part of your project. This loan must be paid off periodically (usually monthly) and with fixed amounts.
- The installment purchase: this is a credit contract that is specifically offered when you purchase a specific product or service that you periodically (usually monthly) repay.
- The lease or lease purchase: a lease contract for a good that allows you to purchase it at the end of this period, at a predetermined price.
- The credit opening: this is a credit contract that gives you access to a cash reserve. This type of contract is often linked to a credit card. There may also be a cash credit or facility (your bank account may show a negative balance).
As you can see, some types of credit are better suited to financing your project than others. For example, the financing of your project is different. For example, the financing of your wedding or your studies is not the same as the purchase of your new car or the financing of a long journey.
3. Consumers enjoy important rights
Consumer credit is strongly framed by the Consumer Credit Act. There are rights and obligations that you must respect. The lenders must also respect some rules for concluding the contract: they must give you clear and need information about your commitment and they have an obligation to advise (they may even advise you not to take out a loan if your financial situation does not allow this )). When you sign your contract for a consumer credit, you have 14 days, from the signature, to cancel the contract. This applies to all consumer credit, other than contracts that, according to law, must be concluded by a notary (unless he gives you this right). To exercise this right of cancellation, you must send a registered letter to your lender within the predetermined period.
For more information about your rights with a loan, you can consult our article about: What are your rights with a loan?
4. There is no “right to credit”
The bank agent has no legal obligation to grant you a consumer credit. Before he will grant you this type of credit, he must check whether you are not included in the blacklist of the Central Individual Credit Register. He must also check whether you have the necessary means to repay this credit and at the same time fulfill the financial obligations for your family. If the bank agent thinks you do not have the necessary financial resources, he can refuse you this loan. That is why it is important to have a stable financial situation before you apply for a loan.
5. Consumer credit is the most commonly used form of credit in Belgium
The various forms of consumer credit appear to be popular in Belgium. According to the figures from the Best Bank in August 2016, there were more than 8.3 million consumer loans, compared to 3 million mortgage loans.
This can be explained by the fact that consumer credit is a daily life loan that allows you to manage your budget in a flexible way. This loan also ensures that you do not have to exceed your budget and that you can finance immediately. But this type of credit must be used in a smart way so as not to end up in a debt spiral.
You now know the 5 important aspects of consumer credit. If you want a loan to finance your projects, you can use our comparison tool to find what you need!