You must meet several conditions to obtain a credit in Belgium. The lending organizations are quite picky and demanding on the establishment of files and sometimes your file is refused. This article summarizes the conditions for obtaining a credit.
Why am I being denied credit?
It is common to say that bankers are careful people. They do not lend money to anyone and under any conditions. In fact, not all credit requests are accepted in Belgium. Thus, many individuals and businesses face refusals every day from their bank.
Here are the major risks that can play against you when applying for a loan:
- Risk of over-indebtedness: the risk of over-indebtedness is one of the primary causes of loan refusal. Your banker must ensure that you do not go into debt and become insolvent in the coming years
- Non-repayment: the banker can refuse you the credit if he feels that you are not able to repay the installments of it. This can result in a fragile file, a lack of guarantee, a project that does not hold water or a profile of borrower in whom he does not trust ( ex: a young person without stable job )
- National Bank filing: if you are registered with the Best Bank and your debt is still being reimbursed, your credit will be refused. On the other hand, solutions exist if your filing is regularized, it all depends on the lending organization.
- Mediation and collective debt settlement: in all cases, your credit request will be refused
- Cascading credit: if you have taken too much credit in a short period, no need to apply for a new loan, you will be refused
Conditions for obtaining a credit
Now that we have seen the conditions that can lead to a refusal, let’s see the minimum conditions for obtaining credit.
- Be of legal age: you must be of legal age to apply for a loan
- Have regular income: it is of course necessary to have regular income to apply for a loan. A fragile file will be refused given the risks run by the lending organization.
- Having a current account in Belgium: this is a prerequisite for obtaining a credit. You must be domiciled in Belgium or Luxembourg. Direct debit (SEPA Mandate) is an additional guarantee requested by banks to avoid involuntary defaults. However, it is not necessary to have Belgian nationality to obtain a credit.
- Good financial health: knowing how to manage your money is a prerequisite for applying for a loan. The lender must consult the Best Bank to make sure that you are not on the blacklist or prohibited banking. A borrower who regularly finds himself short will have a hard time gaining the confidence of his banker in order to obtain his credit.
Assess your debt capacity
Your debt ratio can go in some cases up to 60% depending on your income and depending on the lender. In other words, you must generate monthly income much higher than your monthly payments. This is one of the essential conditions for obtaining credit. A good debt ratio ensures that you can pay your monthly payments without problems, which will reassure your banker.
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