Social loans are loans that are cheaper than normal, with support from the Flemish government.
For a loan, you usually first visit a bank or an independent lender. But if you are in need, and are not eligible for these loans, the Flemish Government also offers social loans.
Do you want to buy your own house or apartment, but do you earn too little to take out a traditional loan from the bank? Then it is possible to take out a social loan.
A social loan does not differ too much from a normal loan, only it is cheaper.
You can already borrow at 1.67%
A few conditions must be met.
Social loans are always provided by social institutions instead of the regular banks or other financial institutions.
A social loan is mainly for people who have a salary that is not too high, and for whom a normal loan would therefore not or hardly qualify. The fact that you do not earn enough would actually be the reason that you do not get a loan, and therefore cannot carry out renovations or buy a new house. The social loan in Belgium is intended for buying and renovating a home or building a home for example.
Term of a social loan
The minimum duration of a social loan is 20 years, and can be extended in some cases, but this must be agreed. It depends on the purpose for which you want to use the money, how much you can borrow with a social loan.
There are certain requirements for monthly income, and no other home may be owned by the borrower. Just like with a normal loan, it is also checked here whether you are ultimately able to repay the loan. This is for the institution to be sure that the money will also return. This requires the information about your wage.
The interest on a social loan in Belgium is at least 1.67%. This is of course a low interest rate, and therefore it is also a best-requested loan in Belgium. For people with a low income this is a solution, to also get a loan.
It is precisely because of this popularity that there is a long waiting list, and therefore it is not always possible to come up with the money for the institutions at once. It is therefore possible that if you apply for a social loan, you will have to wait a while before it is your turn.
Apply for a social loan
If it is inevitable to take out a loan, you are still faced with a lot of choices. First of all you have to decide which type of loan you need, which is therefore best for your situation.
It is also important here to inform yourself well before you enter into any agreement. In fact, a lot has been reported lately about social institutions that charge even higher interest rates than regular banks, so that if you are not well informed, you will end up being disadvantaged. In that case, you might as well take out a normal loan with a regular bank or other financial institution.
So list a number of settings in advance, and see which is the most advantageous for your specific situation.