Costs and Fees When Consuming Loans
A consumer loan is an unsecured loan where you do not need to provide collateral for the loan. Since you do not need to provide collateral for the loan, the interest rates will be somewhat higher than you would otherwise get with a collateralized loan. There are various types of unsecured loans, some of the most common ones include consumer loans, home improvement loans, car and boat loans without collateral and small loans during the day.
Here we take a closer look at the costs and fees you must consider when applying for consumer loans:
The biggest cost of a consumer loan is interest expense. The interest rate on Norwegian consumer loans starts from 8.6%, but will always be determined after an individual assessment of you who is applying. The lender will, among other things, look at credit history, income and debt records. To illustrate, we have included a price example from Ikano Bank:
Price example 65,000 o / 5 years. Effective interest rate 17.89%, establishment fee 900, -. Total 96,030, -.
As you can see, you pay over $ 30,000 in costs to borrow $ 65,000 over a period of 5 years.
Not only does the lender charge interest but they also require you to pay a setup fee. The fee is usually around $ 1000.
It is possible to get a tax deduction if you include the tax in your tax return.
In addition to interest costs, you also have to pay termination fees. Term fees are a small sum that must be paid each time you receive an invoice. The sum will vary, but it is usually somewhere between 30 and 70 dollars.
For more information on interest rates and fees, check out our Finance and Personal Finance glossary. Plan and apply with us now.