No financial history in The Netherlands

Most expats come to the Netherlands for a new employment. They are recruited for a very specific function and therefore have not yet built up financial credit in the Netherlands. Particularly the big banks such as ING, ABN AMRO and Rabobank generally require a guarantee, and without a BKR history it can be difficult to get financing. Most banks require a 3-year employment history to qualify for a personal loan as an expat.

Types of funding for expats

In addition to traditional banks, there are also a number of specialized companies that provide car loans. In most cases these offer 2 possibilities: financing or lease.

Financing

There are 3 types of financing that you can qualify for as an expat:

Continuous credit

Final Term Financing

Personal loan

Continuous credit

A common form of credit is the Continuous Credit. This is not entirely strange, because it is a form of credit in which you yourself determine to a large extent how much you pay off per month. A monthly repayment of 2% of the credit amount is customary, but if you wish so for personal reasons, you can also suffice to pay 1% or 1.5% on the loan amount. Your monthly payments are extremely low. Since this form of credit always allows for early and penalty-free repayment, as well as the withdrawal of already repaid funds, you determine the duration of your loan for yourself. When you take out an continuous credit, it is possible to build in extra space. This has a number of advantages. Often a lower interest rate is possible, you always have extra money at hand, being in the red at maximum interest is no longer a necessity.

Final Term Financing

With a Final Term Financing, the future value of the object to be purchased (eg car/motor/caravan/etc) is taken into account. You only pay interest on this residual value (sometimes guaranteed by the dealer), which makes the monthly installment considerably lower than when you pay off the entire financing. An ideal solution for those people who want to buy a new car or motorcycle every 2 or 3 years and still want to enjoy a low monthly charge. At the end of the term (maximum 60 months), after you have fulfilled all the terms, you have the following three options:

1. You exchange the car/motor/caravan against a new one and take out a new loan. 2. You keep the car/motor/caravan and pay the 'final term' in 1 time. 3. You keep the car/motor/caravan and finance the 'final term' at a very favorable rate.

Personal loan

A popular form of financing is the Personal Loan. As with Continuous Credit, it is advisable to bring the monthly repayment into line with the expected useful life of the object to be purchased (eg car/motor/caravan/etc.). The term of a Personal Loan can vary between 12 and 180 months. If you want a long term, the monthly costs remain low. But you can also opt for a short term, although the monthly costs are of course higher. The interest on the loan amount is already determined at the conclusion of the Personal Loan and remains the same during the term. In the end you pay a fixed amount every month. This way you know exactly where you stand.