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A bad credit loan is a financial tool that allows you to borrow a certain amount of money to finance a project and that must be repaid in full plus interest. The loan is, therefore, in other words, a consumer credit that arises from an agreement between the borrower and the financial institution on the amount to be borrowed and the terms of repayment.
Depending on the reason for the loan, there are several types of loans corresponding to a specific need. If the loan is needed to finance a particular purchase or service such as the purchase of a car, motorcycle or to do work, the credit is the so-called affected loan. If, on the other hand, the loan is used to finance a project, such as a wedding or a trip, the loan is unallocated, which corresponds to an installment loan or personal loan. It is therefore imperative to compare offers before applying for a loan. Always choose an appropriate loan for your projects and keep in mind that borrowing money also costs money.
How does a loan work?
A credit specialist, such as a bank or credit organization, lends you a certain amount of money, either to finance an acquisition or a service, or to finance a project. Once your loan application has been accepted, you must repay it on a fixed term every month with fixed dates including interest. Interest rates are also fixed and therefore do not change over time. To learn more about how loans work, see our Loans Guide.
What is an assigned loan?
The assigned loan is a type of consumer credit contracted with a financial institution and makes it possible to finance a defined good or service. This means that if the sales contract is not concluded, the loan can not be granted. This type of loan can be contracted at the point of sale as directly from a bank. However, even if the credit is contracted with a commercial brand, it is always managed by a bank or a credit institution.
The loan allocated, unlike the installment loan, is a secured loan because it is required on the part of the lending institution to put a property as collateral. In general, the value of this property is approximately equal to the loan amount. In the case of a car loan, the warranty is the vehicle you have purchased. In case you do not repay your loan, the credit institution can seize your property as a guarantee of compensation. Secured loans are therefore considered low-risk loans, since the bank has a guarantee of repayment of the borrower.
What is a personal or installment loan?
The personal loan, also called an all-purpose loan or installment loan, is a loan that is not linked to a specific expense and therefore allows to borrow a certain amount to finance a project. Purchases do not have to be justified with the lending institution when applying for a loan.
The personal loan can finance a variety of projects such as a trip abroad, a wedding, a new computer or the redecoration of an apartment. Unlike assigned loans, the personal loan does not require the collateral (such as a car or house), so it is an unsecured loan. Note that most financial institutions give a business name to their personal loans such as ‘wedding loans’, ‘electronic loans’, ‘holiday loans’, and so on. These personal loans, however, all work the same way.
What is the difference between an installment loan and an assigned loan?
The loan allocated, unlike the personal loan, is linked to a particular purchase, such as a car, a motorcycle or a house. This means that in case of non-repayment of this loan, the financial institution that granted you this credit is entitled to seize your property. Conversely, the personal loan does not require any guarantee or to justify your purchases. However, if you do not pay back your credit, you can be sued. Since unsecured loans offer less security to banks, they are considered riskier. As a result, the interest rate is often higher than for secured loans.
Installment or unsecured loans generally have to be repaid for a shorter period of time than secured loans or restricted loans. An assigned loan may have a repayment period of up to 30 years depending on the credit involved (such as in the case of buying a home), while personal loans have a maximum 60-month period.
What are the different types of personal loans?
Student loans are credits that allow young people to finance their studies. They cover all expenses related to student life, such as registration fees, the purchase of books, the rental of a student room or the financing of a laptop. The repayment of this loan can be immediate or deferred.
Vacation loans are credits that finance a trip. They allow you to borrow the necessary amount to go on vacation and cover all the corresponding expenses, such as your flight, the hotel, and other small pleasures.
The wedding loan, as the name suggests, allows you to finance your marriage without having to touch your savings. They allow having the necessary amount to finance the rental of the room, the wedding dress or the buffet and spread the refund over time.
Loans decorating, not to be confused with renovation loans that allow you to work at home, are credits that allow you to finance the redecoration of your home. These loans make it possible to finance the furniture and the decoration without having to pay a large sum in a single blow.
Electronic device loans
Electronic loans can finance new multimedia devices such as a computer, a television or a home theater. Instead of taking a credit directly from a commercial sign, you go directly to a bank to avoid intermediaries.
Ready all goals
All-Purpose loans allow you to dispose of the sum of your choice (within the limit granted by the banks) to finance a personal project without having to justify which one. Their use depends on you but commits you to repay your loan on time.
Credit buybacks allow you to repay your other loans with a single loan and reset the balance. Instead of paying off several different loans, you repay your loan repayment loan in a single monthly payment.
What are the different types of loans affected?
The car loan allows you to finance the acquisition of a new or used car. You must justify your purchase from the lender to unlock the money. Your car is under warranty to provide security to the lender.
Motorcycle loans can finance a motorcycle, a quad or a scooter, new or used. They work like a car loan and allow you to spread the refund of your new vehicle.
Caravan loans can finance a nomadic vehicle such as a motorhome, a caravan or a mobile home. They operate on the same principle as the car loan and allow you to acquire a new or used model.
Loans works are loans that allow you to finance the facilities in your house or apartment. After making quotes you can go to a bank to apply for a loan corresponding to the amount needed to do your work.
Energy loans or also called green loans allow you to make ecological renovations at home. They can finance the establishment of facilities to lower your energy bills.
How to apply for a loan?
To apply for a loan, you must first define your needs. Do you have a project to finance or would you like to buy a property in particular? By answering these questions you will know which loan to direct you to. Then do a credit simulation. Simulation and demand for your loan online is completely free. All you have to do is enter the type of loan (loan assigned, installment loan …), the desired amount and the ideal repayment period. You will thus obtain the best offers corresponding most to your profile in the form of a comparative table.
To choose a loan, click on “Ask Now” and complete the required fields The financial institution will analyze your file and application to ensure that you meet the requirements for credit.
– be at least 18 years old;
– be resident in Belgium;
– have regular income and not be listed on the negative list of the Central Credit to Individuals.
The minimum conditions for obtaining a loan are not the only things that banks look at. Credit decisions are made based on the borrower’s monthly income and credit history. The conditions may vary from one bank to another, which means that your application may be accepted from one bank and refused by another.
To apply for a loan (whether it is consumer credit, a car loan or an installment loan), it is essential to learn about the offers available on the Belgian market. To do this, you can use our comparison tool to compare loans offered to more than 30 financial institutions.