Attracted by ads, many consumers take out a loan from a Belgian bank. But some credit agreements may reveal unwelcome surprises.

Therefore you should take the time to read the General Terms and Conditions (GTC). It is also better to postpone signing the contract and request a copy of the contract to think about it first.


Before signing the contract

You should pay special attention to the following:

  • the interest rate: it may vary considerably from one bank to another,
  • the penalties for late payments or non-payment of one or several monthly instalmets (immediate breach of the contract with repayment of the entire outstanding sum, compensation up to 10% of this amount etc.)
  • the guarantees (transfer, payment due date, deposit, etc.)
  • the law (often the banks country) and jurisdiction in case of a dispute.

Evaluate your ability to repay. Before granting a loan, a bank should assess whether the total amount of repayment is not disproportionate to the income of the consumer. This avoids over-indebtedness. It is generally considered reasonable to pay one third of ones revenues. The consumer shall in turn clearly inform the bank of his or her  financial situation.

You should take into account all events or expenditures to avoid having to pay monthly payments that are too high. The actual total cost of a credit does not only include the amount borrowed but also interests, fees, insurance premiums etc.


Your right of withdrawal

You are allowed to withdraw from the contract within a delay of 14 calendar days after the signature of the latter.


Your obligations

Always pay attention to the monthly instalment that has to be paid on the due date fixed by the contract. Any delay will result in fees, so a standing payment order is a good mean to prevent this from happening. It is also important to accurately note down the communication reference requested by the bank, so it can easily identify your payment. From the second month of delay in payments onwards, the bank may require a reimbursement of the amounts owed by the borrower and even send your file to a debt collection agency. This agency makes salary garnishments and charges interest on the due sums.

 

The ECC Luxembourg has published a brochure on this subject in French (“Crédit facile”) and in Portuguese (“Crédito fácil”).