Frequently asked questions - Maximum lending
Someone asks for a mortgage and a personal loan at the same time. How should you calculate this?
If one and the same person applies for both a consumer loan and a mortgage at the same time, the lender must decide whether it is responsible to grant this loan. The AFM’s advice in such cases is to calculate one loan first and then include the monthly payments for this loan in the calculation for the second loan. It makes no difference whether the consumer loan or the mortgage is calculated first. The actual costs must always be included in the Model for maximum lending so that a proper calculation can be made of the maximum amount that can be lent.Send this question
How do you issue a cash covered credit card?
With a cash covered credit card, an amount equal to the credit limit of the card is deposited in a blocked account. No calculation is needed for the credit limit prior to issuing a cash covered credit card. Payments made with the credit card are therefore always fully covered by the balance in the blocked account. Since the consumer can repay any debt on the credit card in full at any time, there is in principle no risk that the consumer cannot repay the amount borrowed.
The amount in the blocked account has to be the same as the credit limit
An important condition is that the amount in the blocked account must be at least as much as the credit limit of the credit card, and that the consumer is always free to repay their debt on the credit card with the balance in the blocked account in full without any penalty. Naturally, the other (statutory) regulations with respect to credit provision still apply.
When does a calculation of the maximum credit to be provided have to be made?
In case of credit cards that are not fully covered by a deposit in a blocked account, a calculation of the maximum credit to be provided does have to be made. The AFM’s advice is to base the calculation of the maximum appropriate credit limit for a credit card on a term of not more than two years.
As a provider of credit, may I use my own model to calculate how much credit can be provided to a consumer?
Must all the figures in the model ‘Calculation maximum amount responsible lending' model be substantiated?
Yes, all figures entered in the model for calculating the maximum credit should be substantiated with evidence as much as possible. The client must demonstrate what his income and expenses for mortgage or rent are. This can be done, for example, with bank statements, a rental agreement/lease, a copy of the mortgage, a payslip, or an employer's statement.Send this question
For the model used to calculate the maximum amount of responsible credit in the Caribbean Netherlands, what has to be entered for pre-existing monthly debt service payments?
Current financial expenses have to include the following:
- The interest and principal payments that the consumer has to make each month for current consumer credit.
- Premiums for accrued benefit products. By an “accrued benefit product”, the AFM means a life-insurance policy under which a consumer builds up capital to fully or partially repay a loan at the end of its term.
- Premiums for term-life and other types of life insurance, if they are compulsory for obtaining a mortgage loan or consumer credit.
Premiums for car insurance, fire insurance, home-contents insurance, etc. do not have to be included as pre-existing monthly debt service payments. To avoid double counting, this also applies to the premium for a compulsory term-life or other type of life insurance, if the premium is factored into the effective rate of interest.Send this question