What is installment loan?
The installment loan, also called “personal loan”, is part of the range of consumer loans set up by banks and borrowing agencies approved by the Federal Government. It is a type of credit very popular with the Belgian consumer because of its ease of access and its practicality.
Intended for individuals, it allows to finance projects aiming to improve the quality of life and to meet the needs of the household without having to justify its purchase. need to finance a specific project without drawing on savings.
However, it is not used to finance the purchase of real estate for which other solutions are planned.
The installment loan is quick and easy!
Definition of installment loan
It is a sum of money granted by the bank or the borrowing organization (called lender) to an individual (the borrower) residing in Belgium. The borrower must request it and decide for himself the amount. Of course, he agrees to reimburse the money borrowed!
The loan is concluded for a fixed term and depends on the amount borrowed. It must be reimbursed by fixed periodic payments according to the terms of the contract accepted and signed by both parties.
This credit can be negotiable concerning the interest rate (APR = Annual Effective Annual Rate), the duration and the monthly payments.
It is therefore a secure and unsurprising financing solution.
The contract indicates the amount borrowed, the cost of the credit (depending on the interest rate), the repayment duration and the amount of the installments (in general, monthly). An amortization schedule must be communicated upon signature. Therefore, it is no longer possible to modify the terms of the contract.
(For example, increase the amount originally borrowed or extend the repayment tenure.)
Loan insurance may be necessary when the loan is large. Let us not forget that a loan commits the borrower, it is therefore necessary to check his repayment capacity before committing!
The installment loan is subject to the rules of economic law relating to consumer credit. The legal provisions in force set the maximum repayment periods for the loan, depending on the amount borrowed.
What projects can be funded?
The installment loan is a loan that can be allocated or not affected. Whether it is to buy an expensive item of furniture, a computer, a car, to deal with an unforeseen expense, to organize a wedding, to finance a study trip abroad … But does not concern the purchase of a house, apartment. Nor can it be used by a professional in the exercise of his profession.
It is called affected when it is granted to acquire a specific good (a car for example), the financial organization will therefore require proof of purchase (order form, etc.).
The unrestricted loan is intended to finance any daily expenditure without justifying its use. More flexible, it may however cost more, the rate often being higher!
The installment loan offers a range of possibilities of financing goods or services adapted to the needs of each one, it also makes it possible to have a reserve of personal money.
Under what conditions?
The installment loan is simple and fast, it allows you to keep control of your budget. It all depends on the profile of the applicant, his creditworthiness and the amount of the sum requested.
To be eligible for this type of loan, the borrower must prove that he has a fixed, regular and sufficient income.
The lender or credit intermediary must collect all the data necessary to assess the borrower’s financial situation and his debt capacity.
The lender must also question the Central Credits to Individuals of the National Bank of Belgium. The Central Office contains data on all consumer credit contracts and outstanding mortgage loans granted in Belgium. It also identifies bad payers, that is, people who have not paid back their loans. Consequently, it is on the basis of all the information that he has gathered that the lender decides whether or not to grant credit.
In order to obtain other information, you can make an online request on our “temperament loan.be” site which will assist you in your process until the acquisition of the loan.
A credit commits you, check your repayment capacity before you commit