Social credit in Belgium. You have likely heard about it, but maybe you are not familiar with how it works. Here, we will cover the topic to help you determine whether or not you can benefit from such a scheme.
How Social Credit Works in Belgium
What Exactly is Social Credit?
Social credit is designed for individuals who do not qualify for a normal loan. These are often households with low incomes. Social credit allows them to enjoy more advantageous rates and conditions, particularly regarding homeownership. It can be granted to purchase a house, whether for renovation or construction.
The Limits of Social Credit in Belgium
It is important to know that a social loan is granted under certain conditions and imposes some limits. Indeed, this loan can only be used for acquiring housing. Among the properties, only those intended for permanent habitation are eligible. When it comes to holiday homes or business premises, you cannot rely on such a loan. Additionally, the social loan also limits the amount borrowed, which remains significantly lower than what can be requested through a normal loan. When applying for a social credit, you must meet various conditions. For instance, if you are requesting a social loan to finance the renovation of a habitable home, you will need to provide proof confirming the necessity of the work to be done. It is pointless to apply for a loan to purchase a new kitchen, as it will not be approved.
Formalities to Obtain Such a Credit
In Belgium, various organizations handle social credit applications. Depending on where you live, you can contact these organizations to submit an application or meet with an advisor who can help guide you in building your application. It is also possible to approach standard loan agencies directly. Among them, some can grant this type of loan. The documents required are those needed for any loan, namely: the borrower’s identity card and that of a potential co-borrower, proof of income and residence. You will also be asked to justify the absence of other ongoing loans, either through a bank statement or the current loan contract. In conclusion, social loans are only granted to individuals with limited income. Furthermore, the loan must address an absolute necessity. If not, no organization will accept your application. Therefore, you may need to consider other types of credit if you are determined to secure funds for your project.
