The interest credit is a fairly special revolving credit that is usually taken out as a consumer credit. The interest credit is different because no repayment will take place during the term; it is an interest-only loan. This means that you only have to pay the interest on the outstanding balance every month.
With other revolving credits, such as the personal credit or savings credit, something is always repaid. The repayment is deferred on the interest credit until a later date. Because you do not have to repay anything while the grace period extends, you benefit from the lowest monthly payment with an interest rate credit. If you live in the Netherlands and are 18 to 65 years old, then you are eligible for an interest credit, provided that your income does not consist of social security benefits.
Repayment-free period of the interest credit
During the grace period that belongs to the interest credit, you do not have to repay anything at all. However, you always have the option of paying off without penalty. The grace period usually consists of a 5-year period. At the time this period ends, you can, once you qualify for this, again take a grace period. If you do not want this, you can also convert the interest credit into another credit, with repayment.
Credit limit and variable interest
Also with interest loans you have to take into account the credit limit that you agreed with your lender. This limit indicates the maximum amount that you can withdraw. It is not inconceivable that the credit limit will be used entirely with an interest credit, because there is no mandatory repayment. In order to withdraw even more money, you must increase the credit limit or first make a (penalty-free) repayment to replenish the credit limit.
The low interest that you have to pay for an interest credit is variable. This means that the market interest rate plays a role when it comes to your monthly payments, because your mandatory monthly payments consist exclusively of interest charges.
Benefits take out interest credit
- Borrow interest-free money. You are not required to pay a repayment during the term of the interest credit. Your monthly payment consists of paying the (variable) interest on the outstanding balance. As a result, the interest credit is also the loan with the lowest monthly costs;
- The interest credit offers a lot of freedom. You can always repay without penalty or withdraw credit.