The maximum amount that you can borrow depends on your financial situation. For a small amount you are always qualified : it looks like borrowing money from a relative or friend, they know that you can repay a small amount quickly. That is why they will usually have no objection to lending you a small amount.
For a higher amount you will usually have to turn to a commercial lender such as a bank or a private lender. They will answer your question: “how much can I borrow” on the basis of your fixed income, such as a salary or fixed benefit.
Commercial lenders usually also look at your repayment behavior, as registered with the Credit Registration Bureau (BKR). Money providers who do not look at your BKR quotation will only lend you a lower amount. That is called a flash credit or a mini loan . The amount is a maximum of a few hundred euros. That includes tough conditions, such as a short repayment term of, for example, three months, and high fines for late repayment.
How much can I borrow to a larger expense, like a new car? You can answer this question by requesting a quote from a credit provider. They look at your fixed income to determine which monthly expenses you can bear. The amount that you can spend on the loan per month is important for the maximum amount that you can borrow .
For a larger loan, lenders will probably view your BKR status. They want to know if you can make your payments for a longer period of time. A negative BKR status makes you less creditworthy So you can not borrow a lot of money without checking .
The amount you want to borrow depends on what you need: a mortgage for a house is a different amount than a car loan or a loan for repairing your roof. The upper limit of your loan also depends on your financial situation: those who have a high and stable income can borrow more money, and at a lower interest rate.
The terms of a loan depend on the risk for the lender . Anyone requesting a loan offer from a lender must provide background information about his or her income and assets. Based on this information, they can determine the terms of your loan.
You can already understand how a lender works to estimate the risks of a loan. So you can know how much money you can borrow, without having to request a quote.
The most important factor for how much you can borrow is the level of your fixed income . It then depends on the terms of the loan, such as the interest rate, the amount of the payments and the term.
You can also consider asking family or friends for a loan . But that can often be a risk for the relationship: if you have trouble repaying, it can lead to a fight. It can also be embarrassing to admit that you need money temporarily, but that the bank can not lend you money.
These obstacles to quick money borrowing are a gap in the market for private lenders.
In addition to the usual organizations, such as banks and lenders, you can also borrow money from a private lender . This is a trend in the market for loans: more and more people are having trouble borrowing the usual lenders. It often seems as if a bank only wants to lend you money if you do not need it.
With other lenders it is easier to borrow money quickly. But they have strict conditions for repaying the loan. Debtors with low purchasing power and an insecure income can therefore get into financial problems.
Borrowing from a private individual is suitable for situations where you can not go to the usual lenders. Banks and lenders have conditions for a loan; not everyone can meet that. Relationships with family and friends remain healthier if you do not borrow money from them. You want a strictly business relationship with your lender but room for maneuver in the terms of your loan.
The large number of private lenders guarantees that you can stipulate the conditions that best suit your financial situation. You can choose from different types of lending, maturities and amounts .
Some of the private lenders also lend money to people with negative BKR quotation.
Another advantage of borrowing money from a private individual is that the money can quickly be in your account . For small amounts, the requests are handled quickly and you can spend the borrowed amount within a day.
The UWV is best known as the body that provides benefits to people without work or incapacity for work. But the UWV also provides loans. You can borrow with a benefit if your application meets special conditions. You can not borrow from the UWV for consumption expenses such as broken furniture or the repair of a car. The objective of the UWV is to help you get back to work. They will only consider giving you a loan to achieve this goal .
Do you have ambition to start for yourself? The UWV has a starters’ credit for starting self-employed people. Those who do not qualify for a loan from a bank or lender can fall back on the UWV. The starters credit can be used for the start-up costs of your own company, such as the delivery van of your new DIY company or the office of your software startup or internet company . Make sure you can prove that you will use the money for these expenses . This can be done, for example, by describing the start-up costs in your business plan. The UWV expects you to make it plausible that your new company fits with your background and skills.
The starters’ credit of the UWV is meant for people who, due to illness or disability, can not quickly find a regular job. But you have to be able to work independently. Then you will probably be eligible for a starters’ credit with the UWV.
The pros and cons of a private loan …
An amount that you borrow from a relative or close friend . This is a type of loan called a ‘private loan’. It often happens that children borrow money from their parents or aunts and uncles. It is quickly arranged because the bond of trust usually makes paperwork superfluous. Also, family or friends usually do not charge interest and there is usually no deadline for the loan to be repaid. Therefore, a tantalate loan is often the only option for borrowing with a benefit .
The disadvantage is that the loan sometimes causes problems in the relationship. The agreements are usually flexible, but what if ” unexpectedly needs the money and wants the loan back? Then there is a risk that you will get into an argument about money. Put the agreements on paper in a simple contract. Limit smaller amounts to borrowing that you can pay back in the foreseeable future .
The bank is now extra careful with loans. They take less risk and therefore they ask for a lot of extra information when you apply for a loan.
For smaller amounts you can ask if you can be more red. Red standing can be compared to a short-term loan : you do not need permission, but the interest rate is higher. That is why it is especially suitable for people who do not have savings but still have to deal with an unexpected expense.
For a personal loan or a mortgage, the advantage of borrowing from a bank is that your finances are arranged in one place.
If you want to take out a loan, it is advisable to compare the conditions of various lenders. Look at the interest rates and the term that suits your situation. So you can easily compare different loans with each other, and choose the most advantageous conditions.
The bidders’ offers are free of obligation: you have nothing to lose and everything to be gained by comparing the loan conditions . They know that they have many competitors: that is why some providers will offer you better conditions. If you place several quotations side by side, you automatically see where you are best. That way you can be sure that you have taken out a loan on favorable terms.
Pay attention to the additional costs. In addition to interest and repayments, you often have to pay closing costs.
What are the conditions for missing a repayment? Do you have to pay a fine and how much is that? It may happen that you have a setback and can not make a monthly repayment. And are there any costs involved in accelerating the repayment of the loan? If you have a windfall, then that is a great opportunity to save money on your interest by fully repaying the loan. This will make your loan cheaper. But that is only possible if you have made agreements about this with the lender.
Borrowing money costs money . That means that your repayments and interest together are a higher amount than what you borrow. With long-term loans, your costs can even be higher than the loan amount. A 30-year mortgage will cost you a high amount of interest because it takes so long before you have paid it off. You can therefore keep the term as short as possible for borrowing cheap money .
You want to limit the costs of borrowing as much as possible. The simplest way of “cheap borrowing” is of course not to borrow money. That is why it is less wise to borrow money for consumption expenses, such as a car or new kitchen. Those who are financially conservative, first put money aside on a separate savings account to cover the consumption expenses. Loans are meant for that situation where saving is not an option . This applies, for example, to a mortgage. Sometimes it is also wise to borrow for starting a business.
Anyone who unexpectedly finds himself in a situation where you are forced to borrow money can best limit the amount. Can you get money in cash in another way? For example, by selling stuff, or adjusting your monthly expenses? A simple lifestyle or an extra part-time job can also give you extra money quickly . You can combine these measures with a personal loan to keep your financial situation stable .
Those who have a stable life can save money on housing costs by buying a house instead of renting . Do you expect to live and work in the same city in the coming years? Then you can live up to the dream of owning a house. The cost of maintaining a house and the mortgage will be lower the rent.
The amount of money that you can borrow for a house usually depends on your income. The bank or other lender looks at the level of your fixed salary. This way they can determine what amount you can pay monthly. The maximum amount that you can spend on your mortgage per month then determines the maximum amount of that mortgage.
The maximum amount of the mortgage is not the same as what you can spend on a new house. This is due to the extra costs of buying a house (the purchase price), such as notary fees and transfer tax. To get a good idea of the total cost of buying a house, it is best to make an appointment with a mortgage advisor .
Those who want to start their own business will have to invest first. It takes time, and often also money, to set up your own business: you have costs for renting an office or retail property, capital goods such as machines or cars. Whoever starts a business in trade must invest in an inventory. You can only sell goods that you have purchased first yourself. In order to keep the profit margin good, you often have to buy a large batch at the same time. An order of ten thousand pieces from China can give you a hefty bill. You will sell those items at a profit in the Netherlands . But before the money comes in you will first have to pay your supplier.