How much you can borrow depends, among other things, on the level of your income and the type of income. Read more in this blog about how lenders reach a responsible credit limit to ensure that you can borrow money responsibly.
Calculate responsible credit maximum
To ensure that you are going to borrow in a responsible manner, the lender looks at the so-called ‘responsible credit maximum’. The credit maximum is calculated by taking your net (family) income and subtracting the housing costs and a fixed standard for living. The result of this calculation is called your ‘discharge capacity’.
Determining factors responsible for borrowing money
There are also a number of specific factors that influence a responsible credit maximum. Consider, for example, your income structure. Do you receive a 13th month or extra allowances? Do you have a temporary employment contract or a permanent employment contract or a pension income? Current loans or credit facilities are also regarded as an important part. All these factors influence your borrowing options and therefore also the maximum borrowing amount.
Personal loan or revolving credit?
Do you want to take out a loan? In addition to the fact that it is useful that you know in advance how much you can borrow, it is also good to know in advance what type of loan you want to take out.
You can choose from a revolving credit or a personal loan.
Do you want to borrow money for a major purchase? And know in advance how much you pay per month in interest and repayment? Then a personal loan offers a solution. The term, the interest and the monthly amount are fixed for the entire term of the loan. So you know exactly where you stand.
A personal loan also has the advantage that the interest is tax-deductible if you use the loan amount for a renovation or improvement of your house.
Do you need more flexibility and financial scope in unforeseen circumstances? Then a revolving credit can offer a solution. You only pay interest on the amount withdrawn.
You can keep a part of the borrowed amount in reserve, for example for a renovation or unforeseen expenditure. You do not pay interest on this. With revolving credit you pay a monthly repayment that is usually a percentage of the credit limit (for example 1%, 1.5% or 2%). It also happens that you pay a percentage of the outstanding balance.
With revolving credit you can always repay without penalty and withdraw the repaid amount. In this way, you are assured of a piece of financial space and you can dispose of the money immediately in the event of unexpected expenses. The interest rate of revolving credit is variable. This means that it can vary and depends on the current market interest rate. Do you want more certainty? Then the personal loan is the best loan option!