Borrowing behavior

How a website influences your borrowing behavior (AFM)

The borrowing environment of a credit provider, for example their website, can have a major influence on the borrowing behavior and the choices the borrower makes. The AFM and Freo have investigated this and issued advice. In this article we summarize the research and show you how we as Centerh-loan deal with this.

The AFM calls on credit providers to carefully assess whether their borrowing environment is designed with the customer's interests as the most important factor. Important parts of the borrowing environment to consider include; pre-entered amounts and installments, whether customers are creditworthy enough and ensure that customers are actively involved in the total cost of the credit .

Experiment 1: Pre-entered loan amount

The first experiment shows that when there is a pre-filled amount in the loan environment, customers are more likely to borrow that amount or close to that amount, regardless of their borrowing need. The AFM therefore calls for either the lowest possible amount to be entered or to allow customers to make the 'active choice' by not entering anything.

Experiment 2: Pre-entered repayment amount

For the amount of the monthly repayment amount, it appears that there are greater differences between showing and not showing a pre-entered amount than with the loan amount. People who see a high pre-filled repayment amount on average request a higher repayment amount than people who see a lower repayment amount. The AFM therefore calls for the highest possible repayment amount to be shown.

Experiment 3: Full active choice

If people can adjust the total amount to be paid themselves, people borrow an average of 12 months less . A shorter loan ensures lower total costs. The AFM calls for emphasis to be placed on the total amount to be paid and not on the term.

Loan environment Centerh-loan: Responsible borrowing behavior is paramount

We strive for a responsible credit world and believe in responsible lending. We want to encourage our customers to make the most responsible financial decisions and not negatively influence borrowing behavior. For example, we have opted for a fixed interest rate. Many credit providers offer lower interest rates for higher credits. We believe this can encourage customers to borrow more than they need . Although the interest rate is lower, the total cost of a higher credit will almost always be more.

The pillars that we have taken into account for our application process: