Interest-only private loans: when are they allowed?

An interest-only private loan, where the borrower pays only interest and repays the principal at the end, is legal in the Netherlands. But whether it is smart or even usable depends entirely on the purpose of the loan.

When interest-only works

For a consumer loan between family members, interest-only is allowed. The borrower pays monthly interest, and repays the full amount at the end of the term or earlier. It keeps monthly costs low, which can be exactly what a starter needs for a year or two.

The risk sits at the end: the full principal falls due at once. Agree upfront what happens if that moment arrives and the money is not there.

When it kills the deduction

Used for a home? Then interest-only is a trap. The mortgage interest deduction (renteaftrek) requires the loan to be repaid annuity-style or linearly within 360 months. An interest-only structure makes the interest non-deductible, which can cost thousands over the years.

The Belastingdienst watches this closely. A creative structure that looks like interest-only with postponed repayments is treated the same way.

FLUX5 builds the repayment structure into the contract from the start, annuity or linear for home loans, with the 360-month rule checked automatically. No accidental deduction losses.