Takes into account the fall in income in the event of illness and / or unemployment
Do you have any idea how high your income is should you become unemployed or incapacitated for work?
Many people are not or not fully aware of the fact that the aforementioned events have resulted in a considerable fall in income. How much your income will fall depends on various factors.
However, you can roughly assume that if you (temporarily) cannot find a new job or become incapacitated for work for a long time, your benefit will amount to about 70% of your last wages earned.
However, with a maximum of 70% of the maximum daily wage (as of 1 January € 199.15, this is approximately 4,000 gross per month excluding holiday allowance).
Such a drop in income is of course very annoying. Especially because your fixed costs simply ‘continue’. Now you have a lot of influence on certain expenses such as groceries or outings, but you cannot skimp on other expenses such as housing costs or (health) insurance. If you also have a loan, you are also expected to continue to pay the monthly burden.
What can you do? When choosing a loan, you can choose a loan for which you can continue to pay the monthly costs if you are faced with a drop in income. But in addition, taking out insurance (also called a credit protector) is also a possibility in addition to your loan.
With such an insurance policy you cover the financial risk if you lose your job or become ill for a long time. If that happens, the insurer will take over the monthly payment of your loan. The aforementioned insurances usually only cost you a few euros per month, so it is not unwise to investigate the possibilities or to seek advice.
Do not leave survivors behind with your loan in the event of death
You don’t really want to think about it, even if the chance is not that great, but it may happen that you die during the term of the loan. Some lenders have included in the conditions that in that case an amount will be waived (up to a maximum amount), but rather not than. In addition, the interest is also a lot higher when the said clause is included in the conditions.
If you die during the term of the loan and you have not taken any further measures for this, your next of kin will be charged with your residual debt (provided they accept your estate). If you have taken out the loan together with your partner, he or she is only liable for the residual debt.
If you do not think it desirable that your next of kin are burdened with your debt, you can consider taking out life insurance with your loan. With this, the insurer will pay off your residual debt in the event of death, up to a maximum of the insured amount that you have included in your policy.
Deduct the interest from the tax when you use your loan for home improvement
If you have an owner-occupied house in which you live and you take out a loan to improve your home, such as a renovation, a new kitchen or the installation of a dormer window, you can deduct the interest you pay on the loan from the income tax in box 1 .
Please note that the interest is deductible only if you sign a personal loan. This possibility no longer applies with a revolving credit.
Continue to monitor the development of the interest on your loan
Many providers of loans are active in the Netherlands, which means that competition is fierce. Many providers change the interest rate of the loans they offer from time to time. In addition, these interest rate changes also depend on developments in the financial markets.
It therefore pays to keep an eye on interest rate developments during the term of your loan. When you notice that the interest rate is falling, you can decide to transfer your existing loan to another provider.