You have a real estate project, but need to take out a loan to make it happen. Whether you are French, Belgian or German, you can approach banks in Luxembourg. It may indeed be wise to borrow in Luxembourg to buy abroad.

European law is clear on the subject: European Union nationals can take out loans in other EU countries than their own. Of course, for a French or Belgian citizen, Luxembourg is a privileged destination, not only because of its proximity but also because of the common language and the fact that the Grand Duchy belongs to the euro zone. It is indeed difficult to negotiate a loan when you do not speak the same language as your banker, or when you have to juggle with exchange rates!

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Interest rates and consumer protection

Now that permission to borrow in Luxembourg has been granted, it remains to be seen whether this is worthwhile, particularly in the case of a mortgage. As in France, Luxembourg banks offer loans at fixed or variable rates; however, in Luxembourg it is the variable rates that are most commonly chosen. Other elements must be taken into consideration, such as the penalties for early repayment, the question of borrower's insurance and the protection of the borrower. In this respect, it should be noted that the so-called Scrivener period (11 days between acceptance of the loan and access to the sums borrowed) applies in Luxembourg as elsewhere in Europe.

Borrowing in Luxembourg to buy abroad: beware of borrowers' creditworthiness

And like everywhere else, Luxembourg banks are naturally concerned about the solvency of their borrowers. Contrary to popular belief (or certain virtual advertisements), it is not so easy to obtain a loan in Luxembourg if you are banned from banking (registered with the Fichier des Incidents de remboursement des Crédits aux Particuliers (FICP)) in France or registered with the Banque nationale de Belgique. Financial establishments will therefore ask for guarantees and the matter may be complicated if they demand a direct debit for income. This is obviously possible, but it entails additional steps, particularly with the tax authorities.