A BKR and student loan: it is a combination that raises questions for many (former) students, especially when they want to buy a house or take out another loan. Although a student loan with the Dienst Uitvoering Onderwijs (DUO) is not automatically registered with the Bureau Krediet Registratie (BKR), this debt does affect your financial options. In this article we, as lawyers specialising in financial law, explain precisely how matters stand, which rules apply and what you can do if you encounter problems because of your student loan in relation to credit provision.
The most frequently asked question about a BKR and student loan is whether the DUO debt is visible to lenders in the BKR register. The answer is clear: no, a regular student loan with DUO is not registered with the Bureau Krediet Registratie (BKR). The BKR registers loans and credits such as personal loans, credit cards and overdrafts, but student loans fall outside this registration obligation. This means that banks and mortgage lenders cannot automatically view your student loan via a BKR check. However, this does not relieve you of the obligation to disclose your student loan when you apply for a new loan or mortgage. Lenders are legally required to assess your financial capacity to prevent over-indebtedness, and a student loan is an essential part of your financial obligations.
You are legally obliged when applying for a mortgage to disclose all your financial obligations, including a student loan. If a student loan is not disclosed, the mortgage provider cannot make an accurate calculation of what can be responsibly borrowed. The Dutch government (Rijksoverheid) also states that you will not be entitled to the insurance under the Nationale Hypotheek Garantie (NHG) in that case. What further consequences an application or agreement has depends on the facts and the applicable terms. See Rijksoverheid: reporting a student loan when applying for a mortgage.
The influence of a student loan on your mortgage
Although there is no direct link between the BKR and student loans, the debt with DUO has a significant impact on the maximum mortgage you can obtain. Mortgage lenders take into account the amount you have to repay to DUO each month. This amount is deducted from the capacity you have to bear mortgage costs. The calculation method used by banks depends on the system under which your student loan falls: the old system (repayment over 15 years) or the new system (repayment over 35 years). Because the monthly payments under the new system are spread over a longer period, a debt under the new system generally weighs less on your maximum mortgage than a debt under the old system.
The mortgage provider will usually base its assessment on the amount you actually pay to DUO each month. In some situations, for example before the repayment phase or when payments are temporarily lower, the amount you would have to pay may be used. Making additional repayments can reduce your monthly burden and thus affect the maximum mortgage. For the current assessment, consult Rijksoverheid: student loan and maximum mortgage and your mortgage provider.
What if you have arrears with DUO?
Although a regular student loan is not visible via a BKR check, maintaining timely contact with DUO in case of payment problems remains important. DUO offers, under conditions, options such as an assessment of repayment capacity or repayment-free months. General statements about registration with other registers are not appropriate without assessing the concrete situation.
If you find that you are struggling to repay your student loan, it is crucial to take action in time. DUO offers various options for people with payment problems, such as lowering the monthly amount based on your income (repayment-capacity assessment) or temporarily suspending repayment (repayment-free months). By communicating proactively with DUO you can prevent the situation from escalating and jeopardising your financial future.
BKR registration because of other debts alongside DUO
In practice we often see that the combination of a BKR and a student loan becomes problematic when other loans have been taken out in addition to the DUO debt. Think of a personal loan, a revolving credit facility or even an overdraft on a bank account. These other credits are registered with the BKR. When you apply for a mortgage, the bank will take into account both your student loan (which you must declare yourself) and your BKR-registered debts (which the bank can view itself) in calculating your maximum borrowing capacity.
It is therefore very important to have insight into your current BKR registrations. You can request your own data free of charge from the BKR. If you discover that there is an incorrect BKR registration, it is important to take action as soon as possible. An incorrect registration can significantly reduce your chances of obtaining a mortgage or loan, especially when you already have a student loan that reduces your borrowing capacity.
Concealing a student loan: the legal risks
A student loan must be disclosed when applying for a mortgage. This applies even if the debt is not visible through a BKR check. The Dutch government explains that without this information a mortgage provider cannot make an accurate calculation of a responsible mortgage amount. Have the consequences for a specific application or existing agreement assessed on the basis of the applicable terms if necessary. See the official explanation from the Rijksoverheid.
The consequences of incomplete information cannot be determined without reference to the specific application, agreement and circumstances. What is clear, however, is that a student loan must be disclosed and that it is relevant for the mortgage calculation. DUO can provide an up-to-date debt overview for mortgage purposes, including the debt amount, the monthly payment and the remaining term. See DUO: debt overview for mortgage.
Refinancing a student loan: sensible or not?
Some people consider refinancing their student loan through a personal loan. The idea behind this is often that the personal loan has a lower interest rate or that one wants to ‘hide’ the debt for a mortgage application. However, this is rarely a good idea and carries significant risks. First, a personal loan is always registered with the BKR. By converting your student loan into a personal loan, you therefore create a BKR registration yourself that is immediately visible to mortgage providers.
In addition, the terms of a DUO student loan are generally much more favourable than those of a commercial loan. DUO takes your income (repayment capacity) into account and offers the possibility to temporarily suspend repayment. With a personal loan you do not have that flexibility; you must repay the agreed amount monthly regardless of your financial situation. If you nevertheless get into trouble because of a BKR registration after refinancing, it is advisable to seek legal advice. A specialised lawyer can assist you with the removal of the BKR registration if it is disproportionate.
Legal assistance with problems in credit provision
If you are faced with a refusal of a mortgage or loan due to the combination of a BKR and a student loan, this can be very frustrating. In some cases the refusal is unjustified or the bank bases its decision on incorrect data. It is important to know that you have rights and that you can challenge decisions of financial institutions. For example, you can file a complaint with the Klachteninstituut Financiële Dienstverlening (Kifid) — the Dutch financial services complaints body — if you believe the bank has acted negligently.
At Arslan & Arslan Advocaten we have extensive experience in advising and litigating in matters concerning credit registrations and financial disputes. We can assess your situation, advise on the feasibility of legal proceedings and assist you in contact with banks, the BKR or Kifid. Sometimes a well-founded letter from a lawyer is already sufficient to persuade a bank to change course or to have an incorrect registration removed.
Frequently asked questions
Can a bank see my student loan via the BKR?
No, a regular student loan with DUO is not registered with the BKR. Banks and mortgage providers therefore cannot automatically view your student loan via a BKR check. You are, however, legally obliged to declare your student loan yourself when applying for a mortgage or loan.
What are the consequences if I conceal my student loan when applying for a mortgage?
A student loan must be declared in the mortgage application. If you do not declare it, the mortgage provider cannot make an accurate calculation of what can responsibly be borrowed; the Dutch government also states that you will then not be entitled to NHG. Any further consequences depend on the specific application, agreement and circumstances.
Does the original student loan amount or the current outstanding balance count for my mortgage?
A mortgage provider usually bases its assessment on the amount you pay to DUO monthly; in certain situations the amount you would have to pay may be leading. Making additional repayments can reduce the monthly burden and thus affect the maximum mortgage. Consult the current explanation from the Rijksoverheid and your mortgage provider.
Read also
- Incorrect BKR registration: step-by-step removal plan
- Removing a BKR registration after repayment – your rights explained
- BKR registration and mortgage – is it still possible?
Need help?
Are you having trouble obtaining a mortgage because of a combination of a BKR registration and a student loan? Or do you want to have an incorrect BKR registration removed? The specialised lawyers of Arslan & Arslan Advocaten are ready to assist you. We have the knowledge and experience to bring your case to a successful conclusion. Contact us for a free initial consultation via our website: https://arslan.nl/contact/.
Need help? Our BKR lawyer will be happy to assist you. Contact us without obligation for a free first consultation.
