Suppose you want to take out a revolving credit or personal payday loan. But you have no idea what your borrowing options are.
Whether and how much you can borrow depends on your personal situation.
When will no payday loan be granted?
In particular, unemployed people, people with a negative ABC registration and self-employed entrepreneurs can often count on rejecting the loan application from banks.
But why exactly? This is because a stable and steady income is essential for lending.
The risk that the loan may not be repaid is always taken into account. An important risk is the payment risk, for example if the income falls or falls during the term of your loan. A higher risk often means a limitation of the borrowing capacity and an interest surcharge.
Insufficient borrowing capacity can mean that you want to borrow more than the financial situation allows or that you already have several loans. Other loans ensure that the monthly maximum loan amount is reduced. You then have less money left for the repayment of the new loan. Because rent, food and basic insurance cannot be reduced (too much), which creates a risk of payment arrears in the event of unforeseen circumstances. Having a buffer to fall back on is therefore always advisable. Responsible borrowing requires insight into your own financial behavior. You must repay a loan monthly. If you can’t set aside anything to save now, you probably don’t have the money to pay off the loan every month.
Type of employment determining
The employment contract is also examined. For people with a permanent contract, 100% of the wage is included, but generally not for temporary employment. The calculation is often 70% of the wage, but this varies per bank. Call workers with a 0-hour contract are not eligible for a loan, because the income can suddenly change. This entails too much risk.
For people on unemployment benefits it is not possible to borrow money. Because the unemployment benefit is of a temporary nature, the income drops as soon as someone enters social assistance. With a social assistance benefit, borrowing is never possible from banks, also because of the high risk of being unable to repay the loan and interest.
People with a WAO / WIA / Wajong are allowed to borrow in certain cases, because this benefit is structural: if you are in the WAO it is often for a longer period. However, just as with a temporary employment contract, the entire income is not included in the calculation for the maximum borrowing capacity in this case either. In the case of pensioners with an AOW, the income is included in full, because this is a fixed and monthly amount for a long time.
In the case of self-employed people, things are a bit different. Certainly with the increasing number of freelancers in recent years. At present many banks are subject to the condition that additional conditions apply to self-employed professionals who want a consumer loan.
For example, you must have been active as a self-employed person for at least three consecutive years and be in possession of your own house. After three years there are reliable annual figures that indicate a structural income. The house serves as security for the bank, not as collateral. Moreover, the loan objective may not be business-like: it is a consumer credit. Only when these conditions are met, does the bank proceed to assess the application. For example, they check whether the annual figures meet the desired ratio.
Conditions to borrow money as an entrepreneur
To apply for a personal payday loan as an entrepreneur, you must meet a number of things:
- You can apply for a loan up to a maximum of 65,000 euros as a revolving credit or personal payday loan
- You must be able to submit 3 consecutive annual accounts with the application
- As an entrepreneur you have a positive equity
- You have not had or have had a negative ABC listing in the past
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