User manual of the consumer credit simulator

The consumer credit simulator allows you to calculate the amount of the monthly instalment of a new or existing consumer credit and to check how this instalment varies as a result of changes in some of the variables, such as changes in the amount of capital outstanding, the loan period or the interest rate.

The result of the simulation also gives you the total cost of the loan.

What data do you have to enter in the simulator?

To obtain a simulation, you must fill in the following fields:

• ‘Loan amount’ and ‘Other amounts financed’ (if applicable) – their sum corresponds to the capital outstanding;

• ‘Nominal annual interest rate’ – represents the cost associated with interest on the loan and corresponds to the sum of the reference interest rate and the spread;

• ‘Loan period in months’.

You must fill in the fields related to ‘Grace period or deferral of capital’ if the loan includes:

• A grace period – initial period during which there is no capital amortisation, only the payment of interest;

• Capital deferral – payment of part of the capital is postponed until the last instalment.

If applicable, you must also fill in the following fields:

• ‘Charges paid at the outset of the loan’ – these are the fees paid initially and the single insurance premium, if any of the insurance is paid at the outset;

• ‘Monthly paid charges’ – these are the regular fees associated with the loan;

• ‘Insurance premiums’ – these are the annual values of the insurance premiums.

Stamp duty at the following rates is chargeable on the loan amount used:

• 0.192% per month for periods of less than 1 year;
• 2.4% for periods of more than or equal to 1 year and less than 5 years;
• 2.4% for periods of more than or equal to 5 years.

Stamp duty is also levied on interest and fees charged at the rate of 4%.

All these tax burdens come in for the purpose of calculating the effective annual percentage rate of charge (APR).

What can be simulated?

The monthly instalment (capital and interest) is €28.44 and the annual effective rate of charge (representing the total cost of the loan – interest, fees, insurance premiums and taxes) is 5.984%.

The total amount of interest corresponds to €206.67.

Change in the loan period

If you choose a period of three years (36 months), with the remaining conditions of the example being constant, the monthly instalment is €45.09.

At the end of the loan, the total amount of interest paid is €123.28, lower than the €206.67 paid with the longer term.

Refixing of the interest rate

The example interest rate is reviewed every six months, according to the average amount of reference rate (Euribor) observed in the month prior to the respective revision.

To assess the impact on the monthly instalment of the change in the amount of the reference rate, you must change the following fields accordingly:

• Loan amount – after six months, the amount of the outstanding capital is €1366.90;
• Loan period – after six months, the number of instalments left corresponds to 54 months;
• Nominal annual interest rate – if Euribor goes from 4.5% to 5%, the amount of the interest rate is 5.5%.

Due to the increase in the interest rate, the monthly instalment amount went from €28,44 to €28.77.

Renegotiation of the period or spread

Admitting that, after two years, the loan conditions are renegotiated and the loan period is shortened by one year and the spread is reduced by 0.1%.

In order to assess the impact of the change in conditions on the monthly instalment, you must change the following fields accordingly:

• Loan amount – after 24 months, the amount of the outstanding capital is €946.23;
• Loan period – after 24 months and shortening the term by 12 months, the number of instalments left corresponds to 24 months;
• Nominal annual interest rate – assuming that Euribor remains unchanged (4.5%) and the spread goes from 0.5% to 0.4%, the amount of the interest rate is 4.9%.

The monthly instalment is now €41.55.

Interest on the loan is reduced from €206.67 to €179.94 (which corresponds to the sum of interest paid in the first 24 months – €128.90 – and the interest paid on the renegotiated loan – €51.04).

Early partial amortisation

In order to know the effect on the monthly instalment of a partial capital amortisation of, for example, €200 after two years, you must change the following fields accordingly:

• Loan amount – after 24 months, the amount of the outstanding capital is €946,23. Deducting the €200, the capital outstanding is €746,23;

• Loan period – after 24 months, the number of instalments left is 36 months;

• Nominal annual interest rate – assuming that it remained unchanged, the amount of the interest rate is 5%.

The monthly instalment is now €22,43.

In this case, since the repayment occurs in a period in which the interest rate is variable, no early repayment fee will be charged. Refer to ‘How to renegotiate or repay in advance’ on this website for more information on the early repayment fees that can be charged.

Capital grace period

To know the effect of a grace period of, for example, six months on the monthly instalment, you must also fill in the field:

• Grace period – in this case, 6 months.

During this 6-month period, the monthly instalment will be €6.50. When the loan resumes its standard repayment mode, after the grace period, the monthly instalment amount goes up to €31.21.

Interest on the loan increases from €206,67 to €224,57.

Capital deferral

To know the effect on the monthly instalment of a capital deferral of, for example, 30%, you must also fill in the field:

• Capital deferral – in this case, 30%.

The monthly instalment is now €21,86, except for the last instalment.

The last instalment has the amount of €471,86, which corresponds to the sum of the monthly instalment with the total deferred capital (0.3 x €1500).

Interest on the loan increases from €206,67 to €261,67.