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Finance

How Old Should You Be to Take Out a Forbrukslån and How to Better Your Chances

In Norway, the option of taking out a Forbrukslån or consumer loan is a very popular one. Many people do it and the ones that have not yet tapped into this vital resource, often wonder about the information surrounding it. Things such as how much can you borrow, or what the minimum age should be, are all on the list of requirements. If you are not sure about this and other information, keep reading.

 

The Minimum Requirements for a Consumer Loan in Norway

In terms of the minimum income that you need to have to take out a loan in Norway, the specified number is at least 250,000 Kroner. The age obligation is a minimum of 23 years of age. However, besides these two, there is also a need to have a registered address in the country and be under a tax bracket or paying your taxes, for at least the better part of 3 years.

The things that you cannot have, or may make your application slightly less desirable for the lenders, is if you are in debt or have registered payment notes. To ensure a high standard of consumer protection, the EBA or European Banking Authority has recognized a register that is central to all the information regarding payments. This is accessible by various lenders and banking institutions. Further information about this can be found on their website.

Other requirements such as, in the event you want to refinance your existing loan, the maturity period must be the same or shorter than your current one. sometimes those that are up to 15 years are also considered. However, when taking out a new loan, the maximum term of maturity must be inside of 5 years.

 

What Other Aspects Should You Be Aware Of?

Most lenders would advise you of the better recommendation for you to take out a Forbrukslån that has the lowest interest rate. Things such as installment fees, termination costs, and setup fees, should be taken into consideration, and in addition, it is good to know that the interest rates will, in most cases, be lower as you extend your loan over time.

For most younger adults, it can be sometimes difficult to take out an advance this is because institutions see it as a risky endeavor for them. If you do choose a poor loan term, it could mean a higher effective interest rate, which could lead to further expenses on your part. So how would you better the chances of getting one, but first we look at the two most common credit checks done by institutions?

 

Hard and Soft Checks

Before anyone gets an advance, whether you are an older person or a young adult, there are certain credit checks required for them to do. This is usually done by the majority of places you would visit, such as building societies, banking institutions, credit providers, and more.

Aspects that are looked into include whether you have an existing loan or debt and if you have paid back your credit in time or how you are managing your existing one and how much it is. Sometimes any financial associates liked to you are also checked. Also, things such as an existing mortgage or credit card numbers are considered: https://www.nerdwallet.com/uk/loans/what-is-a-credit-check/

There are typically two types of credit checks, in a nutshell, these are soft and hard.

A soft credit check is the first look at your finances on any credit report. This is not a full check but does include your history. This type does not impact your credit score in any way. You will have access to this information, however other companies will not. This will also depend on if you visit a lender or a credit broker.

As you would imagine, the hard credit check is a more thorough analysis done on your credit and recorded inside of a report which is accessible to other companies whom you approach to borrow money from.

Sometimes if the result is not as appealing, you may need to wait for 6 months before another one is done, giving you enough time to rectify things on your side and better your credit score for the next time around.

 

How to Better Your Chances of Getting a Loan as a Young Adult

Once these evaluations are completed the companies will give you a score between 1-100. Anything from education, debt, age, and income are taken into consideration. Young applicants typically have a low income and some have no educational background, in this case, a lower score is given.

This will also affect the interest rate of the forbrukslån but this doesn’t always need to be the way, there are a few things you can do to improve your chances. The fact that you may not have any debt, is counted as a positive. You can also reduce the risk as a borrower by having a co-applicant, who can apply with you as the main applicant.

This makes them legally responsible for the loan in the event you cannot pay it back. This will help when it comes time to make repayments if you will not need to be able to pay your installments on time or in full. Then the co-applicant needs to step in to help you.

The second way you can better your chances is to apply for several different advances from multiple loan providers. Different providers have different minimum terms or requirements which could suit your needs and financial situation, and you may also find better terms with them.

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