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You wish to obtain, borrow money in the country of Tintin? In this case, you will have to meet several criteria to benefit from a personal loan in Belgium. Indeed, the credit organizations are strict and meticulous concerning the viability of the files and unfortunately, yours can be refused when it seemed, in your eyes, valid. In this article, we will explain what are the conditions for obtaining a credit and we will also see why your personal loan is sometimes refused.
The conditions to be respected to obtain a loan in Belgium
In fact, if you are French, no Belgian law can prevent you from obtaining credit in Belgium. But in reality, banking establishments grant very little credit to people who do not reside in Belgium and therefore do not earn money in the flat country.
Here we summarize the basic conditions for obtaining a credit, a personal loan.
- Be of age: it is imperative to be of age to benefit from a loan
- Obtain regular income: it is quite logical that the bank requires regular income to grant you credit. If your file involves too much risk, it will be refused by the bank.
- Having a current account in Belgium: this is a quasi-compulsory condition to benefit from a personal loan. You must reside in Belgium or Luxembourg. However, you do not have to be Belgian to get a credit. And we will see that there is a (legal!) Way to open a checking account in the flat country and have a better chance of being granted a loan.
- Know how to manage your money: good financial management is mandatory to be loaned money by the bank. As an applicant, you must consult the Best Bank in order to verify that you are not on the black list or on a banking ban.
However, banks are more open to lend to people who are not residents, but who wish to invest in real estate in Belgium. Be careful though, because you will need to have a high salary and have financial stability to obtain a loan.
Do you meet these conditions? Great! You will need to open a local bank account. Which is a breeze. You simply have to present the following documents:
- A valid passport or identity card
- Fill in an opening request form
- Send a proof of home such as a water or telephone bill for example
Be aware that some banks give you the possibility, as a non-resident, to pre-open an account online. When you have answered all these administrative procedures, you will have to wait about a week to obtain the means of payment for your new bank account, card, code etc.
You should also know that Belgian banks cannot access data from the Fine Bank’s FCC file (Central Check File), linked to the ban on issuing checks or having a bank card in relation to payment problems. Same thing for access to the FICP file (File of credit repayment incidents to individuals).
Assessment of your debt capacity
Your debt ratio can go up to 60% depending on your income and the bank that gives you the loan. In short, you have to earn a salary, dividends, or annuities much higher than the repayment of your credit each month. This is an essential criterion for obtaining credit. Indeed, a good debt ratio gives the banker certainty that you will easily pay your monthly payments.
What if your credit is declined?
It is customary to say that bankers are cautious. Indeed, they do not lend money to the first comer, and especially not to an insolvent person in the eyes of the bank. Unfortunately, like everywhere, some credit requests are refused in Belgium. Many individuals and companies thus see their dreams sometimes shattered in view of a too fragile situation. Some major risks can cause your loan request to fail:
- The risk of finding yourself in over-indebtedness: this is of course a real reason which will cause the bank to refuse to lend you money. Your banker wants to be certain that you will not go into debt and present an insolvent profile after a few years
- Reason for non-repayment: the banking establishment can refuse you the loan if it considers that you are not able to repay the monthly payments of the loan.
If the case arises, it is because your file is fragile, that you do not present enough guaranteed, or that you do not have a stable job and income, for example:
National Bank filing: logically, if you are registered with the National Bank of Belgium and you have debts to repay, then your credit will be refused. However, it is possible to borrow from the bank if your filing is regularized. In this case, do not hesitate to obtain information from several banking establishments.
- Mediation and collective debt settlement: your credit request will be immediately refused
- Avalanche of credits: if you have taken too much credit in a very short period of time, you will be blocked for a new loan
Getting a loan in Belgium: the loan offer
Belgium is not known to offer interest rates very attractive. They are also more interesting in France. This adage is also valid for all types of credits. Most Belgian credit companies are controlled by French banking groups. The Belgian credit offer is mainly focused around installment loans and housing loans.
The installment loan
It is the equivalent of consumer credit in France. This type of credit is often attached at an expense like buying a vehicle for example or an object of your choice. The loan conditions are strict and if you take out this type of loan, you will not face any unpleasant surprises.
You can buy back installment loans and combine them into a loan to benefit from better loan conditions. It is no coincidence that many brokers are interested in this mode of credit.
The mortgage or housing loan is a standard mortgage, offering fixed rates or variable rates. The banking establishment may, via the mortgage, seize the property if you are no longer able to repay your loan.