By “consumer credit” we mean any credit used for something other than financing the purchase of a building: car, household appliances, travel, marriage, etc. Consequently, consumer credit does not require any particular justification. The borrower must therefore not provide a purchase invoice or a work estimate to request credit.
This can be: an installment loan (loan for a fixed period and fixed monthly payments), an installment sale (sale for which you pay the price in several payments), a financial lease (contract of rental of a property, accompanied by a purchase option on it), a credit opening (reserve of capital that you use according to your needs, often thanks to a card), a bridge credit (short-term credit used to advance funds pending receipt of a large sum repayable in one go).
Access to consumer credit is generally available from an amount of €2,500 and can go up to an amount of €75,000. The APR (Annual Total Effective Rate) is essentially the criterion of choice to which the consumer must pay particular attention.
APR and consumer loan
The APR is legal variable data which is updated every 6 months by the National Bank of Belgium. Please note, this does not mean that your APR varies every 6 months. Indeed, as soon as your consumer credit contract is signed, your APR (ultimately what determines your interest rate on the sums borrowed) remains completely fixed for the entire duration of your credit contract.
Currently, the APR defined by the National Bank of Belgium varies in a range from 11.5% to 15%. This means that the minimum and maximum APRs are defined by law and do not vary in any way from one broker to another. On the other hand, your broker can make a commercial gesture and grant you the minimum legal rate according to the criteria that he himself defines in the relationship he maintains with his customers.
It is essentially the duration of your credit and the amount borrowed which will vary the APR. Thus, the greater the amount, the closer the APR will be to the legal minimum. The shorter the duration of the credit, the closer your APR will also be to the legal minimum.
There are credit formulas which allow you to benefit from lower APRs but in this case, the borrower is no longer in a consumer loan formula but rather in a assigned loan such as: car financing, a works loan where the borrower must provide proof of their purchase (purchase invoice, estimate for the works, etc.)
Other important points
Once the contract is concluded, the law still grants you a reflection period of 14 calendar days during which you can renounce the credit by means of a registered letter sent to the lender or any other means of communication accepted by the lender and indicated in the contract.
Finally, it is useful to know that in the event of an anticipated balance of the loan, the borrower is reimbursed part of the interest which is in fact not due since the duration of the loan has been shortened.
