Belgium registers a drop in savings – Loan solutions

 

It’s a fact, Belgians are saving less and less. Savings have indeed fallen by less than $ 7 billion in one month. Even if this figure is incredible, it was nevertheless expected. The main reason is the state of the financial market in Belgium which is not in its best condition.

Low interest rates

Low interest rates

Interest rates are at their lowest at the moment and the banks only offer a remuneration of 0.11%, which does not encourage Belgians to save. September recorded a 0.3% drop in outstandings. This low remuneration is also accompanied by high inflation of around 2%. Some institutions, like PSA or DHB, have even preferred to close all savings accounts at home while others do not hesitate to find solutions to further reduce the interest rate they consider still high. Indeed, savings accounts of banks like Fine Bank have been moved to unregulated savings accounts, which allows them to offer zero rates. The whole Belgian financial market is slowing down and it is Belgian savers who are suffering the consequences.

Are there alternatives?

Are there alternatives?

There are not a lot of solutions available to the Belgians, except perhaps the government bond, but again, hope is limited. Online banks, which usually offered better remuneration, are also forced to lower their rates. The government bond, meanwhile, now offers only 0.4% compensation, far from being as advantageous as before. The figures of 5 billion in 2011 are far from being reached since the government bond was only able to make 19 million dollars when it closed. Even the government bond no longer guarantees savings.

Other products as a solution

Other products as a solution

With the low rate proposed for savings accounts, it is the more available current accounts that seem more attractive for Belgians today. Others are moving towards term accounts which offer better rates. Others, finally, prefer to turn to investments and investments. Despite a higher risk, many opt for an investment in movable portfolios. The stock market has become the new playground for some. The rest hope to be able to receive better remuneration in the real estate investment, even if there too, the profits are difficult to quantify.

Tax Back Payment Loan not easy to obtain

A loan for the additional tax payment is very reluctant to take up. In this case, the people involved could be sure that they could not keep the money themselves, but would have to pass it on to the tax office. To make matters worse, a is not easy to loan for back tax payments obtain. This is particularly true if the potential borrower is an independent or self-employed person.

Loans from the bank

Loans from the bank

The most important prerequisite for being able to receive a loan for the additional tax payment is a positive Credit bureau information. If this is not the case, the Credit bureau information should at least be neutral. It would also be imperative that the bank grant a loan to the self-employed or a freelancer. Otherwise there is usually no realistic chance of borrowing. Here viable alternatives would have to be looked for. A credit comparison on the Internet, which is possible around the clock and seven days a week, could bring the necessary clarity here.

As soon as the prospective loaner has found a suitable bank, he can apply for the loan either online or in a bank branch. Payment is made immediately after approval. The tax liability can then be paid and the loan repaid in installments.

Deferral and payment in installments at the tax office

Deferral and payment in installments at the tax office

If personal creditworthiness is not sufficient or there are other obstacles, it is usually not possible to take out a loan for the additional tax payment. In this case, the conversation with the tax office should be sought and a viable solution sought. Unless there are good reasons not to do so, the tax office will agree to an appropriate payment in installments. In this context, it would be very advantageous to transfer the first installment immediately. This would allow the customer to show his willingness to pay to the tax office.

If there is no possibility at all to follow the request for an additional tax payment, there might be the possibility to defer the outstanding amount of money for a while. However, this would require approval from the tax office. In this case, the tax office would be entitled to request an appropriate interest payment from the customer.

Anyone wishing to apply for a deferral would have to do so in writing and disclose all of their income and assets. The application would then be examined by the tax office and approved in writing if all the requirements were met.

What are the characteristics of the bridging loan?

Do you want to finance the acquisition of a house or an apartment using the funds obtained from the resale of your current home? In this case, taking out a bridging loan allows you to bridge the gap between the purchase of your new property and the sale of your property. Very useful, the bridging loan however presents a risk if the resale of the property does not take place in time.

 

How does a bridging loan work?

bridging loan work?

The bridging loan is a short-term loan over 6 months to 1 year, or even 2 years in the event of renewal. Unlike conventional mortgage, which is reimbursed by regular installments, the amount borrowed in bridging loans is reimbursed in one installment at the end of the sale of the accommodation or, failing that, at maturity. Only interest and insurance are reimbursed monthly during the loan. As the borrowed capital does not decrease, this loan therefore has a slightly higher cost than a conventional loan. Furthermore, the amount you can borrow depends on the value of your current property. In general, banks will lend you between 60 and 80% of the estimated price.

 

Precautions to be taken in the event of a bridging loan

bridging loan

First, remember that the sale of your property must be quick, because, at maturity, you will have to repay your bridging loan. Care must therefore be taken not to overestimate the price of the accommodation offered for sale. Otherwise, you could be losers if you do not have offers to buy and your property does not sell. The faster you sell, the less the bridging credit will weigh on your finances.

There is a more flexible intermediate solution that allows you to have no deadline for the resale of your property. It consists of associating your bridging loan with the main loan (back-to-back bridging loan). This credit can thus finance the difference between the sale of your old home and the acquisition of the new one. When you sell, the amount is deducted from the new purchase as early repayment of part of the credit without penalty.