Do you currently need money quickly, or are you looking for a long-term loan? On webstorm.ro you can find information about the various American loan types, the ways of borrowing money and the associated costs. On our website you can find information about the personal loan, the subordinated loan, the revolving credit, mini loans (mini credit), mortgage loans and private loans. You can also find information about American legislation on borrowing money on our website. We hope that by giving you (free) sound advice, that you can make the best choice for your financing.
Borrowing money: which loan types are there?
When you want to borrow money, it is of course important to first be well aware of the different loan types from which you can choose. Each of these loan forms is interesting for one or more specific financing needs. For example, if you need money in the short term (for example within a few days), a mini loan will appeal to you more than, for example, a personal loan. However, for long-term financing, you may prefer a mortgage loan or revolving credit. Below we will briefly explain each of the loan forms. In addition, you can also consult the special information pages to obtain more information about a loan form.
A mini loan (also called 'mini credit') is ideal for people who need money in the short term. For example, do you need a sum of money within a few days or even a few hours? Then a mini loan can in most cases offer a solution for borrowing money. The mini loan is characterized by fast provision, quick repayment and a high interest rate. Most lenders require you to pay off the loan within 15 or 30 days. In addition, the interest rate is often quite high, on average around 7% to 10% per month.
Borrow up to a maximum amount of + - $ 600
Mini-loans are often used to bridge the period between an expense and income, for example if the payment of your salary is delayed. A mini loan can be taken out with most lenders up to an amount of approximately $ 600. In addition, most lenders (who are often based abroad) often do not take too closely the rules of the AFM. For example, most providers of mini-loans do not perform BKR checks for (new) customers. Thus, customers are not assessed for creditworthiness, which can ultimately be a risk for the borrower. -> Read more about Mini-exercises
The personal loan is the best-known loan form for borrowing money. The personal loan is ideal for people who already know in advance how much money they want to borrow. With a personal loan it is therefore not possible to increase or decrease the loan amount in the meantime, a new loan must be taken out for this. Repaying and paying the interest for the loan is done according to fixed guidelines, so it also gives you security over a longer period.
Duration of 1 to 2 years
The term of a personal loan is usually about 1 to 2 years, depending on your personal wishes, you can often discuss with the lender what is the best option for you. The personal loan is often taken out for buying a car, which is why it is also sometimes called a car loan. In addition, you can of course also use the personal loan to finance household electronics, such as a new washing machine.
Low interest, fixed percentage
The interest on a personal loan is considerably lower than, for example, with a mini loan, which is why this is also an advantageous way of borrowing money. The main reason for this is that a personal loan can only be taken out with a reliable lender, whereby it is also assessed in advance whether you can actually repay the amount (BKR check). There is therefore no lender in the Netherlands (taken out with the AFM) that does not conduct a BKR check when providing a personal loan.
Characteristics of the personal loan
The personal loan is characterized by a fixed interest rate over the entire period. The amount of repayment is also laid down in a contract in advance. Finally, the personal loan is characterized over the (relatively) long term. In contrast to a revolving credit, amounts that you repay with the personal loan cannot be withdrawn in the interim. -> Read more about Personal Loans
Revolving credit is increasingly popular for borrowing money. The revolving credit is a flexible form of loan, where you can withdraw repaid amounts later. You only pay the interest on the amount that you have actually withdrawn from the revolving credit. The revolving credit is regularly used to finance renovations, where it is not yet clear in advance what the final loan amount will be.
Revolving credit as a start-up loan
The revolving credit is also often used as a 'start-up loan', as large expenditure often has to be made during this period. The revolving credit ensures that you have money on hand at any time. When taking out a revolving credit, the lender will always perform a BKR check. In addition, your creditworthiness will be checked by means of pay slips.
Characteristics of the revolving credit
The revolving credit is characterized by a (relatively) long term, usually of several years. In addition, the amount of the interest on the loan is also variable during the term. Borrowers have the choice of when to repay the revolving credit. Of course it is advantageous for the borrower to repay borrowed amounts as quickly as possible, because interest only has to be paid on amounts withdrawn in this way of borrowing money. You are required to pay the interest you owe monthly, however, you are not required to repay each month. -> Read more about Revolving Loans
The mortgage loan is the best loan form par excellence for real estate financing. When taking out a mortgage loan (often also called a 'mortgage'), you provide the lender with extra security, because you are giving your real estate as 'collateral'. You thus give the mortgage lender the option to sell the real estate in the event of non-payment on your part. Calculating your mortgage is one of the most important steps in taking out a mortgage loan. Finally, you can then see for what amount you can take out a loan and under what conditions.
Period of 30 low, flexible interest
The mortgage loan is the longest loan form we know in the Netherlands, on average this loan is taken out for a period of 30 years. You can choose to fix the interest rate for a long period so that you know for sure what amount of interest you will pay over the period. Depending on your mortgage type, an amount must also be repaid monthly. Almost everyone who buys a house in the Netherlands chooses to take out a mortgage loan. You can deduct the interest that you have to pay on this loan from your income by means of the 'mortgage interest deduction' scheme of the tax authorities. This means that you ultimately have to pay less tax. The moment you sell your home, you can pay off your mortgage with the lender in one go.
Take out a mortgage loan
Taking out a mortgage loan is a lengthy process, preceded by several discussions with mortgage advisers and an extensive credit assessment. -> Read more about Mortgage Loans
Borrowing money costs money (AFM)
It is (unfortunately) no myth that borrowing money ultimately costs money. Borrowing money is not free, the compensation you have to pay for the money is called 'interest' in the Netherlands. Another name that we will see regularly is 'Annual Cost Percentage', abbreviated to 'APR'. The APR is always a percentage, for example 7%. This means that you annually have to pay 7% of the loan amount in interest. The more you pay off, the lower the amount to be paid in interest becomes. In addition, you often also have to make regular repayments on your loan, although this does depend on your loan form. With revolving credit, for example, you can decide for yourself when to repay, while with a personal loan this must be done monthly.
What does a lender pay attention to
Not everyone is eligible for taking out a loan, as American lenders pay attention to a number of things before providing a loan. The lenders affiliated with the AFM will always perform a BKR check. This check will reveal whether you have been a loan defaulter in the past. If this is not the case, the result of the BKR check is positive. The next step is for the lenders to assess your creditworthiness. For example, the lender looks at your current assets, job security and income. If you have been employed by the same employer for several years, you will be more likely to obtain a loan from the lender.
Income, assets and job security
Depending on your income, assets and job security, the lender will determine an amount of credit for you. You can increase this loan amount by giving the lender more security, for example by having someone guarantee your loan or by giving the lender collateral (mortgage loan).
Most providers of mini-loans are not established in the Netherlands and are therefore not affiliated with the Netherlands Authority for the Financial Markets (AFM). These providers will therefore not perform a BKR check. The risk is that you will receive a loan, while it later turns out that you are not creditworthy. In that case you could run into financial difficulties. It is therefore advisable to only work with mini-loan providers if there are no other options, or if you think you can repay the loan within the set term. The fines for late repayment are very high with this loan form.