Strongbank Stops With Revolving Credit

Strongbank and Bindio stop offering revolving loans from 1 August. This step follows several earlier steps in which the use of the revolving credit was increasingly discouraged. For the time being, the lenders – both subsidiaries of Sampaguita Credit Consumer Finance Nederland BV – focus entirely on personal loans. The interest on the personal loan will be reduced on 5 August.

 

Revolving credit is becoming less and less popular

Revolving credit is becoming less and less popular

Traditionally, almost all lenders offer their customers the choice between 2 types of loan: the revolving credit and the personal loan. In the past, revolving credit was clearly more popular. But in recent years, personal loans have mainly been taken out. Below you can see the development of the outstanding credit amount in recent years (descending credit = personal loan).

There are 2 important reasons for this development. Firstly, the product revolving credit is increasingly discouraged by the government and regulators. With the personal loan, the consumer knows exactly where he or she stands and the loan is always repaid within a predetermined time. With a revolving credit, the consumer can withdraw repaid amounts. Because this option exists, it is more likely that the consumer will be tempted to borrow again. This is seen as undesirable, which means that the rules concerning (the duty of care regarding) the revolving credit are always tightened somewhat.

The second reason is that nowadays the interest on personal loans is lower than on revolving loans. The graph below shows that this was exactly the opposite in the past.

 

Problems Strongbank with revolving credit

Problems Strongbank with revolving credit

The fact that Strongbank comes with the drastic step to completely stop offering the revolving credit is not really a surprise. In recent years, Strongbank has had many problems with customers and regulators with this product. The Kassa program has also paid regular attention to this.

The fact that Strongbank and Bindio now stop offering revolving loans does not mean that they will no longer offer this product in the future either. There is a chance that in the future they will again offer a revolving credit, but with different conditions.

 

Personal loan interest rates down

Personal loan interest rates down

Consumers can still go to Strongbank and Bindio for a loan. But then for a personal loan. The lenders have announced that the interest rates on this product will be lowered from 5 August. It is a reduction of a few tenths on loans from 25,000 euros. These changes will be visible on our site from 5 August.

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