Attracted by ads, many consumers take out a loan from a Belgian bank. But some credit agreements may reveal unwelcome surprises.
You should therefore take the time to read the General Terms and Conditions (GTC) of such agreements. It is also better to postpone signing and request a copy of the contract to contemplate entering into it.
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 instalments (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 applicable jurisdiction in instances 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 set payment at one third of one’s revenue. The consumer shall in turn clearly inform the bank of their 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 following the signing of the latter.
Always pay attention to the monthly instalment that has to be paid on the due date fixed within 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 one´s payment. From the second month of delayed payment onwards, the bank may require a reimbursement of the amounts owed by the borrower and even send one´s file to a debt collection agency. This agency pursues salary garnishments and charges interest on the due sums.
As of July 2003, transfers in euros (EUR) to another country of the European Union cost the same as domestic transfers provided:
- the transfer is less than EUR 50,000
- the beneficiary’s details are complete (bank code BIC / IBAN).
- one has selected the “cost sharing” payment method (if available).
If the beneficiary’s details are incomplete but sufficient to identify them, the transfer can be completed, but the bank will then pass on its processing costs to you.
More and more consumers are regularly exposed to investment or crypto-currency fraud. The minimal recommendations listed here-below were communicated by the CSSF (Commission de Surveillance du Secteur Financier):
- One should never invest in any products or activities that one does not fully understand.
- One should be careful in respect of advertising on social media.
- One should only invest after doing one´s own research.
- All one needs to know is available online and can be primarily found on financial education platforms such as https://www.letzfin.lu
- One should become familiar with some basic concepts on virtual assets.
- One should privilege entering into contract with regulated entities.
More information: https://www.letzfin.lu/