Personal loans have become a common method of funding certain projects, events, vacations, or any kinds of larger purchases that need additional financing, that is, that can’t be afforded with a salary.When trying to get a loan, nobody fantasizes of getting one with a high interest rate. Everyone does quite the opposite, because the low rate means lower costs overall. And, while secured loans tend to be a bit cheaper than those unsecured ones, people usually go for the second option, and they have great reasons for it.
What does it, nevertheless, mean to get an unsecured loan, and what are the reasons for doing this? Are there any cheap ones out there, and what even is a cheap forbrukslån? How can you know if the rente is lav, and how can you ensure that you’ll get it? Those are all rather significant questions, and they are the ones I’ve chosen to answer for you today. Understanding this whole concept of unsecured loans, and of cheap ones for that matter, will definitely help you get the perfect solution for yourself when you decide to use a personal loan to fund a certain project, or pretty much anything else in your life.
Table of Contents
First, What Is An Unsecured Forbrukslån?
Loan costs differ among loan types, which is why you have to first learn precisely what the unsecured option is, so as to understand what is regarded as cheap among those options and what may be considered expensive. Just like you can’t expect the same terms on your home loan and on the personal one, you also can’t expect the same terms on the unsecured and the secured solution. Clearing up this difference between the two concepts is bound to make things easier and help you on your search towards the lån uten sikkerhet lav rente solution. Beginning that search before understanding the concept perfectly probably won’t lead to much luck, as you won’t even know what you’re searching for, and let alone how to recognize cheap solutions.
The unsecured loan, or the lån uten sikkerhet if you prefer the Norwegian term, is basically a borrowing solution that allows you to get money from a lender without needing to pledge your assets as collateral. With the secured option, you provide an asset as security and then, if you default, the lender will have legal claim over the asset. On the other hand, with the unsecured option, the lender will have no legal claim over any of your assets if you default, although they’ll still have to take legal actions to collect the debt you owe them. Overall, the second option is much less risky for the borrowers, and that is precisely why it has become more popular.
Some people may have no assets to offer as collateral, others may simply not want to put them at risk. Whatever the case may be, unsecured loans are certainly trending, and there are numerous lenders offering this opportunity. The question of how those lenders protect themselves here, however, is still unanswered, which could lead you to thinking that they’re just assuming these high risks without any kind of protection and that they’re trusting the lenders without any conditions. Well, not quite.
Apart from having the opportunity to take legal action should you default on your loan, the lenders to something prior to extending you the loan to minimize those risks for themselves. They perform strict credit checks and usually decide to work only with those borrowers who have good scores. And, naturally, they offer higher interest rates compared to those you’d get on secured loans. Those are their methods of protection and they seem to be working very well.
Are There Cheap Ones?
Given the above, you might assume that there’s no such thing as a billig unsecured forbrukslån. I get why you may make such an assumption, since the rates are clearly higher than those you’d get if you backed the loan with collateral, but here’s the thing. There are still cheap options here as well, meaning you can get not only reasonable, but actually below average, costs on this particular option, as long as you know how to do it and what it even means to get a billig forbrukslån. A lot of people don’t quite understand which factors play the biggest role in the costs, meaning they don’t know what a cheap loan is in the first place, and that has to change.
What Does It Mean To Get A Billig Unsecured Forbrukslån?
Getting a cheap unsecured loan doesn’t mean getting one the processing costs of which will be quite low, or even zero, nor the one that doesn’t have a high late fee. While those fees still do impact the cost and they still do need to be considered in your choosing process, the point is that there’s something much more important to keep in mind and check. Something that has the highest impact on the cost of your unsecured loan, and if you’ve been reading carefully so far, then you already have an idea as to what that something is. Care to take a guess?
Interest rate. That is the main factor that impacts the cost of your forbrukslån and that makes it either billig or not. Remember, though, that the rate will be calculated over the actual repayment period you’ll agree on and as a percentage of the actual amount you’ll be borrowing, meaning that you have a say in the total costs as much as the lenders. Yet, the lower the rates, the lower the overall costs will be, which is why you always have to aim at finding and getting a lav rente if your goal is to get a cheap unsecured loan. I’ve made it clear that such cheap options do exist, and now you know what to focus on so as to find and get them, but there may still be some confusion around this – confusion that needs to be cleared up before you begin searching.
What Is A Lav Rente?
The confusion is, of course, related to what constitutes low rates in the first place. How can you know if the rate you’re being offered is low or not? Not having any idea about the average ones will definitely leave you wondering, confused and unable to determine whether the deal you’re about to enter into is good for you, or if it may have been designed to charge you a huge interest amount. Well, rates on unsecured loans can range anywhere from 5% to even over 40% or close to 50%. I know that those percentages are probably scaring you, but the truth is that you’ll keep the rate quite below the higher limit if you play your cards right and if you understand how to actually get the lav rente.
How To Get That Lav Rente?
There are concrete steps to take when getting a personal loan, and everyone basically goes through the same ones, as explained on this page. Did you know, however, that the steps you’ll take prior to applying and prior to even beginning your search for the right lenders will also have an impact on the rente you’ll get, i.e. on the total amount of interest you’ll ultimately pay? If this is new to you, then you’ve probably never taken out a personal loan before in your life, or perhaps you need a reminder on what it is that impacts the interest rate, apart from the lenders’ decision. Your credit score.
So, clearly, the lenders aren’t the only ones that will put you close either to the minimum or to the maximum interest rate you can get on your unsecured forbrukslån, but that’s actually a good thing. It means you’re as much in control as they are. Well, okay, they may still have more control than you, but you do have an impact on the rates you’ll get, meaning you can secure yourself a billig loan if you play your cards right. And, naturally, the cards you’re playing here should be aimed at improving your credit score before filing the application. Lenders perform a credit assessment based on your age, your annual income, your payment history and your existing debt, leading to them getting a score that assesses how big of a risk you are as a customer.
If you are in the group of high-risk customers, due to your poor credit score, you’ll get offer higher interest rates, and if your score is exceptionally low, then your entire loan application will be rejected. On the other hand, if you have a great score, with 70 usually being the threshold, you’ll get offered the best possible terms and the lav rente you’re after, consequently leading to getting a billig forbrukslån and completing your ultimate goal. So, since you have this kind of control, working on your credit score prior to applying is certainly a must, as it will increase your chances of getting a cheap unsecured loan and not getting into more unnecessary debt.
Part of the control is yours, and part is the lender’s, as made clear already above. Thus, different lenders can offer different interest rates even on the same credit score, which is why sending your application to more of them, taking a look at all the offers and comparing them is also a crucial part of your hunt for the lowest rates. Finding the perfect solution is clearly possible, but you’ll have to work for it, i.e. do your research on the lenders and thoroughly compare their offers before agreeing to anything and signing the loan contract.