With a revolving credit you always have money behind you. You can withdraw free money from the credit up to a certain maximum amount and only pay interest on the amount withdrawn. If you do not borrow anything, credit does not cost you anything, but you always have the certainty of having more financial scope when you need it. This is very useful, for example, if you have to make some big purchases or want to renovate your house. But how exactly do you apply for a revolving credit? This is done in 6 steps which we explain in detail in this article.
When to take out an ongoing loan?
When is it wise to take out a standing credit? For example, when you often buy on installments. Then you usually pay a high interest rate. When, for example, you purchase goods on payment at an online department store, you pay an alarmingly high interest rate that approaches or equals the maximum permitted interest rate of 14%. This means that you pay interest of € 140 on an annual purchase of € 1,000 on an annual basis. Do you want to prevent this, but would you like to use credit? Then a revolving credit is often the best option. Then you will benefit from a considerably lower interest rate of around 5 to 7 percent, which means a halving of the costs.
How do ongoing loans work?
Ongoing loans work so that you can determine how much money you withdraw from the maximum amount of credit. A loan therefore often does not have an expiry date when the entire amount has to be repaid. The revolving credit without an end date can therefore only be stopped if you request it from the lender, or of course if it is terminated by the lender yourself. Before the credit can be discontinued, it must of course have been repaid.
When you have withdrawn money from the credit, you must of course pay it back. This happens every month with a payment consisting of both interest and repayment. This payment is often 1% to 2% of the total credit amount (ie not what you have borrowed but the maximum loan amount). First of all, you mainly pay interest, but the more you have repaid, the larger the repayment part becomes. Because you pay a fixed amount every month, you always know exactly what amount you have to set aside per month for the installment amounts.
Step 1: Searching for an attractive credit
The first step, of course, is to seek an attractive credit. Nowadays this can be done very easily and conveniently via the internet. You can compare different credits on several websites (such as Independer or Lening.nl). On the basis of only a few details (for example whether you have a house and your age), the current interest rates will be shown for many different credit providers. This often involves minimum and maximum interest rates, because the exact percentage is also determined by other factors.
It is good to know that the interest rate is variable. That means that it can go up or down. After all, a loan does not have an end date, so the interest moves with the market and is never set longer than a year. Most lenders therefore use their own annually changing borrowing interest for revolving loans.
Step 2: Enter all your details
If you have found a lender who has attractive interest rates offers attractive conditions, you can fill in a quotation form. You often do this on the credit provider’s website. There you enter all kinds of information about your family and your personal (financial) situation. Of course it is very important that everything you fill in is correct, because it will be well controlled. Not only that, because if the lender of credit would find out for a while that you have forgotten or exaggerated certain things, the credit can be withdrawn and you will often have to repay the total loan amount. Have you filled everything completely and truthfully? Then you press send to send the request for quotation.
Note: because you do not enter into an agreement when filling in this data, there is nothing wrong with filling in multiple quotation forms. Only when you get an offer that you can use, you put your signature underneath and you are stuck with it. By requesting a loan offer from several lenders, you can be sure that you have a choice of several attractive offers.
Step 3: Checking the data
When your data has arrived at the lender, your application will be assessed. Sometimes this happens (partly) automatically, but often it is manual work where all data are checked against the actual situation. This is still a matter of quiet waiting for you. Often the assessment takes place within two working days, but sometimes it can take a little longer.
Step 4: Credit check at the BKR
When all the details you have filled in are found to be valid, a credit check is performed. This is done at the Credit Registration Office (BKR) in Tiel. The BKR keeps track of every Dutch person who has to deal with financial obligations, such as mortgages and other loans, telephone subscriptions in your name and other loans or debts. If you have too many of those obligations for what you earn, or if you have (or have had) payment arrears, your application will still be rejected at this stage. You will of course be well informed of this.
Step 5: Offer made to measure
Once your data has been approved and you also passed the credit check, a tailor-made offer will be put together for your situation. This happens, for example, on the basis of your age, the amount of credit, your family composition, your income and so on. Of course, especially the interest rate of the credit supply is interesting, because that determines what the total costs will be. You will receive the offer by e-mail or post. When you have requested the quotation from your existing bank or lender, the quotation can also be placed online. Often you can even immediately accept it.
Step 6: Close the credit
If you are satisfied with the offer you receive, you can accept the quotation. Exactly how this should be done differs per provider. Sometimes you have to put an old-fashioned signature on a printed offer and send it, but now accepting can also take place digitally. Anyway, after your approval the credit is activated quickly and you can withdraw money. This is often very simple, especially when you have taken out the revolving credit at your own bank. Then you can usually simply transfer money from the credit to your current account and use the money immediately.
What else pay attention to credits?
What else do you have to pay attention to when you want to request a revolving credit? Consider, for example, the following aspects:
- Would you like to be able to pay off extra on your ongoing loan in the interim? Then choose a credit provider where this is possible and of course this can also be done without any fine.
- Choose a revolving credit with a linked term life insurance policy if you want to be sure that surviving relatives will not be left with your credit debt.
- Do you have your own home? Then look at a special credit for homeowners. The house is not used as collateral, but you benefit from lower interest rates. If your home has surplus value, you can also look for a special WOZ loan if you want to have a renovation done and therefore need more financial scope for a longer period of time.
- Beware of offers for continuous loans from department stores, online shops and other parties, because they generally use a very high interest rate, making these credits very expensive.
- Instead of multiple small (and expensive) loans, it is often better to take a single ongoing loan. Then you have a better overview of the costs and these costs are often a lot lower.