Households can borrow thousands of euros less | Financial

Earlier this week, the AFM announced that the borrowing standards for consumer credit will be tightened. This is done to reduce the chance that people borrow more than is responsible and will therefore have financial problems.

When providing a loan, lenders look at the income and the fixed costs to arrive at a responsible loan amount. It also looks at how much money households have left to make ends meet. These loan standards are determined by the Association of Financing Companies in the Netherlands (VFN) and apply to all lenders.

Extra storage

Since this year, lenders have to charge an extra surcharge on top of the standard amount. This surcharge will be significantly increased from 1 January, in most cases by more than 200 euros. In April next year, the rules will become even stricter. The exact details of those changes are not yet known.

For singles with or without children, where the net income is around 2,000 euros per month and the housing costs around 400 euros, the difference in the amount to be borrowed is between 11,000 and 12,000 euros, according to Geld.nl. For a family with children that sees 3,500 euros coming in monthly, of which 800 euros is needed for rent, the maximum loan amount is more than 9,000 euros lower. The difference for households with a mortgage of around 1100 euros and 4000 euros in income is also around 10,000 euros.

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