Research by the Across Lender shows that about half of the 5000 respondents had no basic knowledge about borrowing extra money. This group was able to name a few options for borrowing extra money, but often did not know the basic knowledge for budgeting. Other different studies have shown that many consumers do not know very well which loan forms there are, what the consequences are of borrowing money and how you can budget.
For example, many consumers do not know that they can borrow extra money with a mini loan . Being in the red is a bit more known among consumers, but many do not see red as a form of loan. This further emphasizes that they do not know all the consequences of all loan forms, because being in the red is indeed a loan and also costs money.
Where can you and I actually borrow money easily? Borrowing from friends and family is common. It is often easy to borrow extra money from them. Borrowing money directly from employers is sometimes also an option. Employers sometimes offer loans, for example in the context of a private PC project. The employer then finances, for example, the pc for and withholds the repayment and interest from the wages. Other variants are also possible. For example, some employers do not make loans for a PC, but for a bicycle. Borrowing extra money from an employer is a form of borrowing money privately.
In addition to borrowing money privately, there are also the professional lenders:
- Finance company;
- Card issuer;
- Mail order company;
- Municipal Credit Bank.
Finance companies are one of the main providers of consumer credit. They provide approximately 40 percent of all loans to private individuals in the Netherlands . The finance companies originated in the United States around 1850. It originated from a Singer company. They sold sewing machines, but they were too expensive for consumers. They came up with the idea of paying off. Nowadays it is possible to purchase a product on installment at many companies. Subsequently, the customer cards were also developed.
Banks are also one of the main providers of consumer credit. Together, the banks make up approximately 45% of the loans issued. Unlike finance companies, the banks entered the market late. Banks were only really available to private individuals around 1950. This was also in connection with the growing prosperity. Wages were increasingly transferred digitally. Today, the banks are indispensable in our society. Banks are now not only a convenient place for salaries, but banks are also ideal for savings, investments and mortgages. And of course let's not forget about providing loans.
The credit card companies are also part of the credit providers. A credit card company guarantees a consumer's payment obligation for, for example, payments at a hotel. The consumer can then later repay to the credit card company. Of course this is accompanied by interest.
Then we also have the mail order companies . A well-known mail order company is Wehkamp. A mail order company brings its products to the attention of consumers by means of a catalog (can be sent by post or digitally with a website, for example). Consumers can then decide whether they want to pay for the products in one go or whether they prefer distributed payments. Ordering from mail order companies is often tempting. Many consumers have therefore received a BKR registration from a mail order company by making ill-considered purchases.
Finally, there are the Municipal Credit Banks (GKB) . The GKB do represent only 3 percent of all loans issued. As the name suggests, the GKB is an organization from the municipality and mainly provides social loans.
Borrowing extra money is therefore possible from friends and family, but also from financing companies, banks, credit card companies, mail order companies and the GKB.
The government is aware that it must educate its citizens about borrowing money in order to avoid debt. Borrowing extra money is always possible, but borrow responsibly. Know which loan types there are and research by requesting quotes which loan is best for you at what interest rates and conditions. More and more consumers are also receiving budgeting tips and the government is also working on stricter rules regarding borrowing extra money with a mini loan .