What is credit sum and how does the credit sum work?
The credit sum is the amount of your loan and depends on the amount that you want to borrow and can borrow responsibly. The rules regarding your credit amount differ per loan type and provider, but always relate to your financial situation and your family situation.
Calculate credit sum
If you want to borrow money, you first determine the amount you need. For a specific purchase you usually know what amount you need. But it could also be that you, for example, want to finance a renovation of your kitchen. Of this kind of expenditure you often do not know exactly what it will ultimately cost. However, it is often possible to estimate the amount that you think you will need.
The lender also influences the amount that you borrow. This always checks your BKR registration first, because you cannot borrow money with a negative BKR registration. The bank then determines the maximum amount that you can borrow based on your financial situation and family composition. The bank calculates your borrowing capacity by deducting your fixed income and the amount that you need each month to make ends meet (the borrowing standard) from your monthly income.
Based on this data, you and your bank determine the credit sum of your loan.
Credit for personal loan
With a personal loan you borrow a fixed amount that you repay in installments. Once you have taken out the loan, you will receive the amount in your account and you will immediately start paying. You can then spend it yourself on a new car or fridge, for example.
The credit sum of a personal loan cannot be changed during the term. Does it later appear that you still need extra money, because the renovation of your bathroom, for example, is more expensive than expected? Then you have to take out a new loan. Optionally, you can transfer your personal loan to another bank if you still want to adjust the credit amount.
Credit sum revolving credit
With a revolving credit you do not have a fixed credit sum. You do have to deal with a fixed credit limit. A revolving credit means that you get an amount that you can withdraw at once or in parts. If you have repaid a part, you can re-record that part later. The credit sum, the part that you actually borrow, can therefore always change.
The fact that you can withdraw again and again can be an advantage of the revolving credit. If you unexpectedly need an extra amount, you do not have to take out a new loan. At the same time, you will also be tempted to borrow more than you need. Try to close your credit limit as low as possible to prevent this.
Tip! Not sure whether a personal loan or revolving credit suits you better? The article “Personal loan or revolving credit?” helps you on your way.
Credit sum and costs
Try to keep the credit sum as low as possible. The more you borrow, the higher the interest amount. You also take longer to pay off with a higher credit sum. The amount that you pay in interest will increase if you take longer to repay.
Tip! Do you have extra money once, for example because you have received holiday pay? Then consider whether you can use this for the extra repayment of your loan. With this you lower the credit sum, which means that you will also pay less interest.
The difference between the most expensive and cheapest loans is 700 USD per year on average? Do you also pay too much for your loan?