Credit opening, home loan, small loans, and everything that you need to know


What is a credit?

A loan or loan means that a person or financial institution (the lender) lends money to another person (the borrower). The latter then repays the loan in accordance with predetermined conditions. Interest will also be paid on this as long as part of the capital has not yet been repaid.

With a credit you can withdraw money up to a certain maximum (the credit limit). The reimbursement is largely done according to your own possibilities, although a small minimum monthly reimbursement is usually agreed in the contract. Similar revolving credits then usually also have no end date and are subject to varying interest rates that depend on the state of the market.

Banks often mean the personal loan with a loan . Money is then lent for a certain purpose (car loan to buy a car, renovation loan to finance renovation work, …). Similar loans are less flexible because there is no re-admission of the repaid capital, but they will usually be much cheaper in interest. With a personal loan, it is agreed in advance how much the monthly reimbursement will be and in which period this will happen.

Types of credits

Appropriations exist in many different forms. A credit card is also a form of credit where goods can be purchased by means of a card, whereby the repayment (whether or not in different disks) can only be made at a later date.

A credit opening is a fairly flexible form of borrowing money. It is the collective name of various credits that are usually the same in terms of characteristics, except for small differences. Think of credit cards, a cash credit or a money reserve that are examples of flexible ways to borrow or keep money to bridge a temporary difficult financial period. However, do not forget that each of these credits is kept by De Centrale for loans to private individuals ( CKP ) and this is also taken into account for determining your creditworthiness after applying for a loan. In other words, many credit cards and bank overdrafts can influence the maximum amount that you can borrow.

Appropriations also occur in specific forms such as a bridging loan that also serves to bridge a period in anticipation until you are able to repay this loan. Usually a bridging loan is used to purchase a new home, while waiting for the old house to be sold.