Borrowing standards have been raised significantly in 2021. This means that as a consumer it is less easy to get a loan. This does not only apply if you want to take out a new loan. Even if you want to switch the current loan to a loan with a much lower interest rate, you will have to deal with the new loan standards of 2021. Heavy standards, whereby you can no longer obtain financing with a lower income.
What are loan standards?
Loan standards have been drawn up to ensure that you do not get into trouble. This standard ensures that financing is always provided responsibly. The loan standard includes how much money you must have left over each month after paying your monthly repayment and interest to be able to live on.
The loan standard ( VFN Standard ) consists of a fixed and variable part. 4 categories have been created.
- Single with children
- Married / living together
- Married / living together
Fixed and variable amounts are linked to this. In addition, a surcharge is charged. The higher your income, the higher the loan standard. Which also makes sense, because you will probably spend more if you have a higher income.
In addition, an additional surcharge will be charged. These can be found in the table below:
|Family situation||Storage 2020||Storage 2021|
|Single||$ 40||$ 275|
|Single + children||$ 226||$ 451|
|Married / living together||$ 119||$ 326|
|Married / living together + children||$ 224||$ 408|
Big difference in storage
Borrowing standards have not been raised very much. The big difference really lies in the storage. This has been substantially increased, so that the maximum amount to be borrowed for all groups has fallen sharply. A difference with 2020 of more than $ 10,000 is the rule rather than the exception.
If you want to know whether it is still possible to take out a loan, you can always request a loan free of charge and without obligation . This costs you nothing and does not commit you to anything.
Contrast with mortgage is great
The much stricter borrowing standards of 2021 are in stark contrast to the mortgage standards. These were actually further relaxed in 2021. Whereas in 2020 the income of the second applications could only be included for 70%, in 2021 this can be for 80%. A significant difference.
Loan standards 2021 also for refinancing your current loans
Interest rates are currently historically low. Many consumers are benefiting here at the moment. Nevertheless, we fear that, due to the stricter loan standards, many consumers will no longer be able to re-arrange their overpriced loan. If you now have a loan with a higher interest rate, you are stuck with it. We expect a solution to this in the future. As soon as this is the case, we will of course report this immediately.
More to come
The stricter loan standards for 2021 will not be the last of this year. Another increase will follow in April 2021. With this increase, a little more customization will be done. For example, the car or the number of cars in the family will be looked at. The exact elaboration of this standard is now the subject of discussion at the VFN. We will of course also report these as soon as more is known.