Exactly how much you can borrow depends on your income. The general rule is that you may not pay more than 33% of your monthly income. If you earn 1500 euros net, then you can pay off around 500 euros a month. That would mean that you can borrow a maximum of 110,000 euros at an interest rate of 3.55%.
Car loans and renovation loans are much cheaper than personal loans.
Do you want to buy a car? Renovate your house? Then compare the interest rates for a car loan or a renovation loan.
Do you end up with an amount that you would like to borrow and that you can pay?
You are finally ready: house, tree, animal. But in reality, borrowing money is not that simple anymore, especially if you get little help.
If you do not handle it carefully, a loan can cause you more headaches than pleasure.
Urgent questions arise. How much can I actually borrow? What will the monthly costs be? What about the interest? When buying a house, these questions are part of a fixed ritual. But with a simple loan? Slightly exaggerated. After all, this is not a loan that you take out for life. Buying a house is something special, but a simple loan?
How much you can borrow depends on various factors. The most important thing is that you have an income. As an employee or self-employed person, it doesn’t matter. If you only do interims, you must be able to prove that you have been working for 2 years or more. If you do not have a fixed income and you still want to borrow, you must find someone who will guarantee you.
The second most important question is: how much do you want to borrow? If you want to buy a car there is usually no problem. Everyone is eligible for loans up to 10,000 euros, unless you are already blacklisted.
But you probably want to make a large purchase, such as a building plot, an apartment or a house. Otherwise you would not ask the question.
How much can you borrow?
It is generally known that it is best to spend a maximum of 33% of your income on paying off a loan. However, slightly more factors play an important role. If you already have to transfer 50% of your wages to be able to pay the rent, then paying another 33% on a loan is not a good idea. You would then be left with only 17% of your salary for other purposes.
Rich incomes can sometimes borrow up to 50% of their net wages. The bank is then confident that he or she can pay off. That is not surprising, because when you earn 10,000 euros per month it is easier to make ends meet with the remaining amount (5000 euros) than when you earn 2500 euros and have to make ends meet with the remaining amount (1250 euros). That is why the bank also looks at income and does not always stubbornly stick to the unwritten rule of 33%. The bank would, after all, shoot itself in the foot.
Get help from specialists
Before you take out a loan it is important to investigate. Consult specialists. Do not blindly rely on the advice that your bank gives. They are also there to enrich themselves as well as possible. After all, the bank remains the bank. It is therefore wise to pay a visit to banks where you are not present. Purely to see what they can offer you. If that is a lot better than what your bank offers, you can turn to the bank with this new information. There is a good chance that they will bind quickly if another lender dares to take the gamble or offers better conditions.
The ghost word: repayment capacity
It is simply an unsatisfactory fact. You see the bank as a number. No more and no less. There are numbers that repay their loan on time each month. There are also numbers that do not, they will eventually end up in the debt restructuring. Every customer applying for a loan carries a certain risk for the bank. That is also the reason that the bank applies strict rules. Yet there are also a number of rules that are not fixed. Such as how much you have to save per month. We recommend that you always have between 800 and 1400 euros per month, depending on your situation. If you are single, you need 800 euros to live on. Insurance, gas / water / electricity, food, gasoline; they are all things that cost a lot of money. Don’t be fooled by that!
Build a buffer
Suppose you can use 33% of your income to pay off a loan. Amazing, right? Yes, with one big but. Make sure that you can actually bear these costs. A lender will always take your rent, alimony, etc. into account. But not with how much gas you drive through it every month, or how expensive your insurance is. They will also not know if you have an extravagant lifestyle. Be your own boss and keep this in mind at all times. Then it can never go wrong!
Make sure that you do not pay more interest than the legally permitted maximum of 15%.