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Payday Loans in Belgium, All You Need To Know:
Get the grips on how to secure the best payday loan in Belgium in a few minutes. We’ve collected all the information regarding this type of credit, and factors you’ll need to consider before making an application such as the cost, amount, term, commissions, and any additional charges. We’ve also availed you of all the information you need regarding the lending policy in Belgium and factors affecting consumer loans.
Take a read!
The current market for payday loans
Payday loan conditions change with the changes in the financial systems. This is why we keep updating you with the most recent news about them after every month. The news covers any relevant happenings both within Belgium, the EU, and beyond that might affect these loans.
- The EU has had yearslong ties with both Russia and Ukraine, mostly depending on them for grains and fuel. The war between the two countries has not only faltered post-pandemic recovery in the EU, but it has also threatened to weaken the economies due to disruption of supply chains. The financial sector is, in that way, rendered unstable.
- The EU spelled out sanctions and retaliatory measures that it’s taking against the war, requiring banks to shrink back from giving cross-border credits. While these measures are not imposed, banks would need to comply with them to have the financial system remain resilient through the war.
With an unstable financial system and economy at large, the conditions of credits might not be as good as they’ve been before the war. Moreover, banks may go slow on granting loans to reduce liquidity risks.
Lender and Borrower Obligations on Payday Loans in Belgium
All providers of payday loans in Belgium need to be authorized by the Financial Services and Markets Authority before they start providing their services to the public.
Below are some of the obligations that a lender in Belgium has to comply with:
Obligation to provide all the information about the credit offer
Lenders are required to provide their clients with all the information about the credit to the loan before they sign up for the contract. The information is important in helping the client make an informed decision and be prepared to fully commit to the loan they’re taking out.
The information should involve the conditions of the loan: interest, repayment term, amount, any added fees, and commissions, among others. The client should be allowed some time without the withdrawal of the offer to make comparisons of other options and make sound decisions.
Obligation to provide regular updates about the loan throughout the repayment time
After granting the loan, the lender is required to provide all the necessary and regular updates about the loan offer to the client. The lender should step in to answer any queries that the client develops along the way. In the event of any changes, even as they are indicated in the contractual information, the lender is required to send reminders of the same.
Below are some of the obligations of borrowers in Belgium:
Obligation to hire loans responsibly
It’s important to note that once you take out a loan, the duty to pay it back is laid on your shoulders. Hence, you’re obliged to take out a loan that’s going to improve your financial situation and make the repayment process comfortable.
Be sure to make comparisons of different offers and sign up for one that you’re most comfortable with.
Obligation to assess all the information about the loan
After receiving the information about the loan contract, be sure to go through it, noting down every detail and change. The lender will give you some time to go through it, hence, make the most use of that time to be sure of what you’re committing to. In case of any questions, consult with the lender, who should be ready to explain.
This step is important in avoiding surprise charges or commissions in the future. You’ll be fully braced for all the changes that might happen in the future as well.
Obligation to avail to the lender of all the required information
The processing of a loan involves a lot of risks on the side of the lender. This is why they may ask for so much information about the borrower and go ahead to ask for supporting documents. Be sure to provide all the necessary information to the lender to make the processing of the loan an easy task.
Some lenders will reject your application if you fail to provide a single document.
Obligation to abide by the conditions of the loan
Once you place your signature to receive the loan, the lender assumes that you agree to all the conditions of the offer. This is why failure to comply with any of the conditions of the loan means defiance and may attract penalties. Lenders are allowed to file a case against a client once they refuse to repay the loan.
How to apply for a payday loan?
The process of applying for a payday loan is generally the same. However, the mode of application varies with an entity. While some choose online applications, others prefer having the client apply from their offices.
What are the steps of applying for a payday loan?
- Assess your financial condition to know which loan offers will favor you. Take time to search for different loan offers and skim through or consult about their conditions. Comparing three of the best available offers, narrow down to one that best addresses your needs.
- After tapping on the loan, the lender will send you an application form. Fill out all the blank fields with the most reliable information about yourself – name, ID number, date of birth, email address – then go ahead to select your preferred conditions of the loan (repayment period, interest rates, amount, commissions, etc).
- You’ll receive pre-approval instantly for the online mode and after 48 hours for the physical application.
- Be sure to provide all the required supporting documents. This will enable the lender to assess your financial records and make it easy to process your loan.
- After verifying all the information in your documents, the lender will send you pre-contractual information. Read it through to be in full knowledge of what you’re committing to. You’ll also get a hang of any changes to the loan in the future and any charges that you’ll face.
- If in full agreement, sign up for the offer either in the entity’s office or using a digital signature.
- The lender will, hence, release the funds to your account.
Requirements for payday loans in Belgium
After knowing how to land the best loan and how to apply for it, the next step is to know whether you qualify for that kind of financing. Generally, Belgium is a safe lending place that seeks to avoid scammers. This is why the lending process is strict.
What requirements will you need to meet?
- Be of the right age. Lenders are allowed to offer loans to persons of age 18 and above. However, many lenders start offering financing to 21-year-olds and not persons not older than 65. The age limits, however, vary with entities.
- Have a Belgian residence permit. Residence permits are granted to all the legal residents of Belgium regardless of their nationality. Hence, payday loans are accessible to expats who meet the set-out requirements.
- Have a stable form of income. In some Belgian entities, borrowers will need to provide the last six payslips before their loan is processed. Having an income is a demonstration of your ability to repay the loan.
- Have a healthy level of debt. The lender will assess your “income to debt ratio” to determine whether you qualify for financing. If you have way too many uncleared debts, the lender may reject your application.
The above requirements vary with different entities. For instance, different entities have different level-of-income requirements. Moreover, having a poor credit history will hinder you from getting financing, hence, the importance of taking out loans wisely and one at a time.
Documentation for applying for a payday loan
The lender will require supporting documents as they process the loan to establish that you meet all the outlined requirements.
- Copy of your ID card or passport
- A bank statement that details the income against the expenses of the previous months
- Documents showing your income for the last up to 6 months
- A document showing the budget of the project for which you’re taking out the loan.
Hiring a payday loan from the bank that has our income and receipts domiciled will reduce paperwork as the entity will access the data it needs online.
Who grants payday loans in Belgium?
After the financial collapse in 2008, many entities providing loans got their way into the market, changing the situation from the monopoly of banks. The breakthrough of these non-bank lenders realized a great improvement in the lending markets as some of them are measuring up with bank’s standards.
Entities that grant payday loans:
- Bank entities
- Credit Financial Institutions (CFE)
- Private Lenders
- P2P Lending Platforms
Obtain financing through banks
✔️ Offers a variety of products
✔️ Flexible loan limits
✔️ Attractive repayment periods
✔️ Low interest rates
❌ Slow concessions
❌ Expensive due to more additional charges
❌ No funds without seniority
❌ More related products
Credit Financial Institutions (CFE)
✔️ Open for any purpose
✔️ Friendly interest rates
✔️ Few additional charges
✔️ Fast concessions
❌ Strict requirements like banks
❌ They only operate through stores or dealerships
Getting loans online with private companies
✔️ Speedy processing of loans
✔️ Lenient requirements
✔️ One can qualify without seniority
❌ Expensive due to high interest rates
❌ Can hurt your credit history if taken out irresponsibly
Payday Loans through P2P Platforms
✔️ Excellent financing conditions
✔️ Fast and 100% online application
✔️ No related products
❌ Slow processing of funds
❌ Strict eligibility requirements
❌ Few platforms that grant payday loans
FAQ: Frequently Asked Questions
What is a payday loan?
A payday loan refers to an amount of money that one borrows from an entity to return after a specified period. The borrower remains indebted to the lender until the set time of repayment expires and after having repaid the loan in full. They will have to repay the principal amount they borrowed plus accrued interests and other additional costs as stated in the contractual documents.
Failure to make on-time repayments of the loan may attract penalties.
Why don’t you give me payday loans?
There are several reasons why borrowers don’t qualify for payday loans. They might have a record of unpaid loans, whereby the ratio of their income against the debts is unbalanced. Hence, lenders will not risk financing them. They may have failed to provide all the required information about them, making it hard for the lender to assess their financial records.
Another reason could be their residence permit has expired or they have no legal form of identity.
What is the INE form for a loan?
The INE form is a document that you receive from the lender. It details all the conditions of the loan including the amount, repayment period, interest rate, the APR, commissions, and any additional charges.
What is the binding offer of a payday credit?
In situations when we ask for a binding offer, the lender will be required to leave our contract open for a minimum of 14 calendar days. During this period, we will be free to compare other loan offers without the fear of losing the offer we currently have.
Can payday loans be paid in advance?
A Belgian borrower has the right to pay the loan in advance whether in full or partly. This process is only successful, however, if the loanee notifies the lender early enough and if they abide by all the conditions of the loan. For instance, the borrower will be required to pay the principal amount they took out and all the accrued interests, commissions, and other charges.
What if I take out a loan online and then regret it?
The Belgian Law has given an allowance for borrowers who wish to withdraw their loans after taking them out. However, this only happens a few days after hiring the loan – 14 calendar days. Any time beyond the safe days means we’re at the risk of attracting penalties.
What happens if I don’t pay back a payday loan?
After taking out a loan, you’re tasked with the responsibility of paying it back. If you don’t take it upon yourself to repay it, the lender may file a case against you, which will be all the more expensive. Moreover, it may hurt your credit history and impede you from accessing a loan in the future.
When to Apply for a Payday Loan
A payday loan comes in handy when you’re looking to finance your project and don’t mind getting it from any lender. Taking time to compare different options will help you end up with an affordable loan with excellent conditions.
Loans in Belgium are accessible to both natives and expats. However, the conditions might be a little more strict for expats but patience will pay off with a good, compatible offer.
A loan should bail you out of a poor financial situation. If not, you don’t need it, as it will plunge you into over-indebtedness. The repayment process should be smooth and allow you to get the most out of the loan. If not, the loan is considered a bad debt.
Take time to compare different loans and hire them responsibly and only when you’re sure of your ability to pay them back.
About this page, our methodology
What this page is for: we’re out to help you get the most compatible financial product to your needs and peculiarities. Hence, we marshal all the necessary information about consumer credits including the best offers in the market, how to compare them and end up with the best offer.
Source: the information regarding consumer credits in Belgium and how they are regulated is drawn from the Financial Services and Markets Authority, and the National Bank of Belgium.
Methodology: The data relating to the conditions of these products (amount, term, interest, etc.) have been obtained through online research and consultation of the official statistics of the aforementioned reference sources.
About FUNDGECKO: we are an online comparator website that helps users with little knowledge about financing. We equip the user with the most recent and reliable information regarding consumer credits, how best they can compare them, and end up with the most suitable option.
Note: the services we offer are totally free for the user, as FUNDGECKO obtains its income from advertising and its featured products.