Not a day goes by in our various business locations where we do not receive a credit request from an unemployed person. Indeed, people who become unemployed are also faced with having to make major purchases and the unemployed, more than anyone else, therefore implicitly see their contributory capacity extremely limited. He, more than any other taxpayer, will therefore have difficulty paying cash for the price of a washing machine, a car or a computer: in short, to meet his basic necessities with a view to finding a job. Is it legally possible to grant a loan or credit to an unemployed person?
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A harsh reality…

When your unemployment benefit is around €1,400 and you have paid your rent, the balance with which an unemployed person must meet their needs very quickly becomes limited. Therefore, buying a basic necessity such as a car, a washing machine, a living room table, a refrigerator can prove to be a real challenge… However, finding a job requires showing up properly dressed and well-groomed for job interviews. selection, browse job offers and send application letters and a CV, tasks for which the use of a computer and a printer is essential.

Can we grant credit to an unemployed person?

What will determine the willingness of a financial organization to grant credit will be, in addition to the contributory capacity, the possibility of carrying out a seizure in the event of non-payment of monthly premiums. Belgian and Luxembourg legislators have decided to make unemployment benefits below a certain amount unseizable (except with regard to the recovery of alimony arrears). The unemployed person is therefore in some way guaranteed to keep their unemployment benefit.

This gift from the legislator, which removes responsibility from the unemployed, acts like a sword of Damocles hanging over the shoulders of the unemployed. Indeed, if, as we have explained, the unemployed person is protected from recovery of their unemployment benefits, their capacity to borrow is, by force of circumstances, extremely reduced.

Thus, very often, the unemployed will experience a refusal to their loan or credit request since the financial organization will not be able to carry out a seizure at source on their unemployment benefits in the event of non-payment of monthly premiums. .

Is there an alternative to allow the unemployed to access credit?

Regarding the installment loan

The unemployed person must obtain a guarantee, a guarantee or a guarantor if they want to obtain credit or a loan. In other words, the unemployed cannot borrow alone. He will have to find a co-signer, a co-borrower, that is to say a person who borrows with him and who must be perfectly solvent.

Regarding mortgage credit

The unemployed person who owns a house or real estate (land, building, etc.) will be able to take out a mortgage loan but on the condition of taking out a mortgage on the real estate.

This still means that the amount of the loan cannot be less than €25,000 because the costs of setting up a mortgage are so high that it would not be reasonable to take out a mortgage loan for a lower amount.

Are you looking for a job ?

Did you know that our website is full of advice to help you accomplish the major projects of your life, including finding the job you need. Consult our section on this subject: your projects, finding a job.
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The time has come for the 2014 school year to begin, and with it comes a host of additional costs. From September, our students return to school. We will have to wait until the end of the month for the academics to return to their classrooms and lecture halls.

The start of the school year is always synonymous with significant expenses and financial assistance proves useful and necessary to relieve the family budget. Fortunately, your CPE financial partner is at your side to give you a little help to ensure your children have the most comfortable return to school.

What are the additional expenses?

The cost of starting a secondary school year is estimated at nearly €750 per child. This expense relates to the purchase of a school bag, new clothes, shoes, textbooks and any expenses required by the school.

Of course the cost of going back to university is much higher. In 2014, the ordinary university fee amounts to €835. But here again the peripheral costs are numerous: rental of a kot (between €300 and €450 per month); purchase of syllabi, purchase of a small car sometimes etc…the cost of a university year can of course be quite high.

Crédit Populaire Européen offers you its credit solutions

We grant you credits and personal loans from €2,500.00.

You can therefore borrow a small amount from €2,500.00.

Examples of “back to school” credits

• Personal loan of €2,500.00. Repayable over a period of 30 months: monthly payment of €93.98 (APR 9.95%), cost of credit €319.14. Total reimbursement: €2,819.14. You can vary the repayment period: this credit is repayable over a period of 24 to 30 months.
• Personal loan of €5,000.00. Repayable over a period of 36 months: monthly payment of €160.22 (APR 9.95%), cost of credit €767.92. Total reimbursement: €5,767.92. This credit is repayable over a period of 24 to 36 months.

Use our simulator

Our website offers you numerous tools for your perfect information. Among all our services, use our simulator to get a more precise idea of your financial capacity and the credit solutions we offer you.

Our brokers are at your service to advise you

Our brokers will explain to you in person the documents you must present to us to establish your credit and will advise you on the formula best suited to your needs. Do not hesitate to call us for any information.

Do you want to take out a new loan? Whether it is a car financing, a personal loan, consumer credit or a mortgage loan. Our brokers will have to examine a series of objective criteria to assess your ability to take out a new loan. Calculation of the debt ratio online.

And above all your ability to repay it without difficulty and without altering your budget and your quality of life.

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Among the few determining criteria that we will briefly recall in this newsletter, the debt ratio will most certainly be the determining criterion.

A brief overview of the question now

What are the determining criteria for obtaining a favorable decision on your credit application?

Our brokers will examine several key criteria:

• The first criterion will be to ensure your solvency: to do this, our  brokers will verify that your professional or other income is sufficient to allow you to repay the requested credit and those that are already in progress;
• Being hired under a permanent employment contract is very important;
• You will be asked to produce your last three salary slips and your bank account statements which prove that your professional income is indeed paid into your bank account;
• You will also be asked to declare all current credit contracts;
• It will be verified that you are not registered or that the  cancellation of your registration with the National Bank of Belgium is more than a year old;
• Our brokers will analyze your debt ratio.

What is the debt ratio?

The debt ratio is the percentage that your financial commitments (debts, outstanding credits) represent in relation to your total income. It is calculated using the following formula:

Total of your debts or due dates to be repaid monthly / the total of your monthly income X 100 = ….%

For example : Mr François Castel is employed in a service company. He receives a monthly net salary of €2,750. He pays each month: €1,250 for his mortgage loan, €350 for his car financing and €278 for a personal loan.

His debt ratio therefore amounts to: Total of his monthly expenses = €1,878 / total of his professional income = 2,750 X 100 = a debt ratio of 68%

Analysis of the debt ratio

To obtain new credit, the debt ratio must evolve within a range going from 30 to 50% maximum.

If the candidate borrower does not own a home, the debt rate cannot exceed 40 %.

On the other hand, if he owns a home, the debt rate can reach 50% maximum.

In the example of Mr. François Castel, he will no longer be able to borrow because his debt ratio of 68% is much too high.

Are there alternative solutions?

Of course when a person repays several loans taken in isolation, it is always desirable to carry out a credit consolidation so that you only have one credit.

In the case of Mr François Castel, our brokers will carry out a credit consolidation as part of the mortgage credit which will allow Mr. Castel to only repay a single monthly premium which will be much less than the accumulation of the three premiums taken in isolation.

Thus, via a credit consolidation, Mr. Castel’s total premium will amount to €1,450. This represents a debt ratio of 52%, which could allow subscription. A small additional credit which will be included in the same and single credit.

Do not hesitate to contact our brokers for more information…

Do you want to deal with an unforeseen event but you don’t know what the maximum debt rate is? Whether for consumer credits, real estate loans, current credits, repurchase of credits. Or consumer credit. Cpe helps you at all times and takes your borrowing capacity into account. Depending on the financial situation, monthly net income, alimony, whether or not you have a co-borrower.
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This morning we are addressing an important aspect of your credit application: guarantees. In certain cases, the borrower will have to provide security for his credit request. Sometimes, this is the obligatory signature of your spouse or your partner. In certain cases, the guarantees presented by the borrower could prove insufficient and the credit application would then necessarily have to be accompanied by additional guarantees. In the area of guarantees: we will distinguish between real and personal security. In a second part we will deal with the assignment of debts and finally we will end with the guarantee. This trilogy of articles will give you a synthetic and complete view of the concept of guarantee in terms of credit.

The concept of guarantee

The activity of lender is of course not without risks: when the lender cannot repay its debt, the bank could incur a loss. Furthermore, it sometimes happens that a customer does not provide all the guarantees required for a loan and that it is necessary for a third person to sign alongside them (spouse, cohabitant, parents, guarantors).

The function of guarantees – also called “securities” for the lender – is to reduce the financial consequences of the risk of insolvency of a debtor customer. It allows him to recover all or part of his debt.

Legal forms and advertising

Most security interests require legal forms of creation and disclosure measures. For example, a free guarantee, that is to say, a third person who commits to your side requires the drafting of a guarantee contract separate from the credit contract. Likewise, the creation of a mortgage (real security) requires a notarial deed (authentic deed) and is registered with the Registrar of Mortgages. Failure to comply with these formalities can completely destroy the value of a security interest.

Types of guarantees

We distinguish between real security and personal security:

• Real security interests relate to one or more specific movable or immovable assets. For movable property, we generally speak of pledges and for real estate, we mainly refer to mortgages.
• Personal securities involve the engagement of a third party, a person who serves as security. These are essentially the sureties.

Match your credit application with a guarantee

A customer who has submitted a credit application may sometimes be initially refused: in this case, it may turn out that the solvency guarantees presented by the customer are insufficient.

In this case, our brokers will look for solutions with you:

• Thus, for the case of a married couple under the regime of separation of property: if one of the spouses wants to take out a loan to purchase property of their own, they may be asked to attach the signature of his husband;
• Likewise, the borrower could add the recourse of a third person as personal security.

These guarantees will be likely to fundamentally change the profile of the borrower’s file and thus can usefully promote acceptance of the credit application.

Our next part: the assignment of receivables (assignment of remuneration)

To facilitate decision-making when granting loans, banks and credit organizations are increasingly using “credit scoring”. This tool makes it possible to assess the risk of non-reimbursement based on qualitative and quantitative data collected beforehand.

What is credit scoring?

Developed around twenty years ago, “credit scoring” was designed to help banks sort credit application files based on a pre-established framework. Concretely, it is a questionnaire which makes it possible to define the profile of the borrower. This form seeks to collect all the information concerning him, namely his marital status, his marital status, his professional life, his income, his assets, etc.

This information allows the bank to quickly know if its client is one of the people at risk in terms of credit. The score obtained by the borrower from the information in the questionnaire will determine whether it is possible to grant him the credit he is requesting or not.

Use of credit scoring by lending companies

The main concern of a credit organization is whether its client is able to repay their monthly payments. It is therefore necessary to avoid granting a loan to a person who risks not honoring the deadlines by establishing the profile of defaulting borrowers. To do this, it uses its own statistics (case of large banks and important financial institutions) or it purchases databases from specialized companies (case of small banks).

The bank then draws up a questionnaire containing all the information likely to determine the borrower’s profile, awarding different points for each response. Even if the basic principle is identical, each type of credit often has its own questionnaire and rating. The borrower receives a score for each of their responses. The banker simply calculates his client’s total score to determine whether he is one of the people at risk in terms of credit or not in order to consider granting or refusing the loan.