Since the beginning of this month, Dutch residents can borrow more money. The Association of Financing Companies in the Netherlands (VFN) has launched a new calculation method that significantly shakes up lending standards.
Whether you want to buy a car, make your home more sustainable with a heat pump, or simply seek more financial breathing room: the maximum amounts are going up.
However, not everyone will benefit equally. It also matters what purpose the loan is for. One group, in particular, stands out with thousands of euros in extra borrowing capacity.
What You Can Borrow More For Now #
The Association of Financing Companies in the Netherlands (VFN) recently announced a new calculation that impacts the financial situation of many people. It appears that Dutch residents can borrow more money. For instance, more credit can be granted for purchases such as a car or a heat pump.
Single parents, in particular, will benefit. With the new VFN formula, they can now borrow €18,500 with a net income of €2,500. Previously, this was €15,000. Single renters also see a significant improvement with the new formula. Someone with a net salary of €2,000 can now borrow €15,000 instead of €12,000.
The exact amount you can borrow depends not only on your income but also on your expenses, allowances, and family situation, which are all considered by lenders.
This Is the Reason for the Increase #
One reason the VFN has updated its calculation is that the list of sustainable investment measures has been adjusted. Solar panels, for example, are no longer on the list because new regulations mean they now take longer to pay back. However, various types of heat pumps have been added to the list.
Another reason for the new calculation is that households have, on average, started earning more. The VFN reports that according to the financial institute Nibud, the expenses of Dutch households have risen by an average of 3.2 percent, while disposable income has increased by 4.4 percent.
Especially single people in the Netherlands, both with and without children, have seen their financial situation improve over the past year, while families with children have seen little change in their expenses relative to their income.
Borrowers Are Being Protected #
In the Netherlands, lenders must adhere to rules based on data from Nibud and the VFN. Banks and other lenders can use this data to estimate how much someone can responsibly borrow.
The Dutch Credit Collective reports that the rules regarding borrowing money will become stricter. Currently, several services are not yet covered by the lending standards, but this will change next year. This concerns services that allow users of, for example, webshops to pay in installments.