Whether you are looking for finance for a car, house or consumption, there are certain aspects that you should consider before signing a loan contract.
Depending on the amount you need to borrow, it will be a bigger decision to find the right funding for your needs.
Here on the page you get an insight into:
- The various financing options today.
- Requirements and conditions for you when applying for funding online.
- What you need to be aware of in connection with online financing.
With the right financing solution, it’s easy to get the economy right for whatever you dream of – without compromising your short or long term finances.
Read here and get to know your funding options in the online loan market .
Why UseCathbad Banks?
MatchBanks is an online comparison service that easily, quickly and securely compares different financing options for you.
We only show you the loans that suit your needs, so you can get started with your application faster.
Our comparison service is free and non-binding for you as a customer. Do not worry about paying a fee or tying yourself when usingCathbadBanks.
At Cathbad we advocate transparency in the loan market. We therefore present both advantages and disadvantages of the various loans and loan providers. How to get the best conditions when choosing and opting out of loans.
Read more about Cathbad’s business model here.
To get started withCathbadBanks, simply fill out a quick form stating your personal and financial details.
Then you get access to your very own loan list with specially selected loans for just you.
Financing – What forms can you choose?
There are many types of financing options today – both in the bank and at online loan providers.
In particular, we see a large increase in the online loan market, where more and more people are applying for online consumer loans of all sizes.
If you are looking for financing for car or home , you can also find these at online loan companies.
Since finding the best loans out there can be confusing and time consuming, it is worthwhile to use an online comparison service such asCathbadBanks.
Here you will find a collection of loans that can allow you to finance both car, housing and consumption – all depending on your borrowing requirement.
If you are looking for financing for a car online, it can easily be done.
Your first deposit when it comes to car finance may be going to your bank or consulting your car dealer. But here you typically have to set the car as security for the loan and pay a deposit.
If, on the other hand, you examine your options for car financing on the online loan market, you can borrow up to 500,000 kroner without pledging your car.
The online loan companies are not interested in knowing what you want to use the loan for. You can fund your car with an online loan without justifying why you want to borrow money.
If you are on a home hunting or want a loan for renovation, it is the home financing you are looking for. Such a home loan can thus both be used as financing for the house, extension and renovation of your current home.
Housing financing is divided into two categories:
- Home loans
Although these two loan options may be used for the same purpose, there are significant differences between them.
With a mortgage loan it is possible to finance up to 75-80% of the price of the home depending on whether it is a year-round home or a holiday home.
It is often cheaper to fund your home with a mortgage loan.
You can borrow with both a fixed and a variable interest rate and there is a maturity of up to 30 years – often even with the option of choosing a grace period in a number of years.
In the case of a mortgage loan, security is often provided in the form of real estate, where the security is a registered mortgage deed.
Mortgage loans are financed by what is called bonds that an investor then buys. In Denmark, most bonds are bought by international investors.
The borrower receives money and then settles the loan by paying installments and interest to the mortgage bank.
The remaining 20% of housing finance must be financed in a different way. This is where the home loan comes into the picture .
There is usually a higher interest rate on a mortgage loan compared to the mortgage loan, and you must bear this in mind when you start paying off your loans.
If you are looking for financing a house with a loan provider online , this is a home loan.
This is because you can also use this form of financing for anything other than just buying a home.
If the bathroom needs to be refreshed, or if you want to add a garage to your current house, home financing online is an obvious option.
Housing financing and interest-only payments
If you have both a mortgage and a mortgage loan, it may be a good idea to opt-out for your loan.
Deductible means that you do not have to pay anything back on the loan over a certain period of time.
So you can use the saved money to pay off the most expensive loan first.
It can be a financial advantage to start paying off your mortgage and then the mortgage loan, so you get rid of the high interest rate first.
Financing of consumption
Just as you can use your online car and home loan, it can also be used to finance consumer goods such as clothing, furniture and electronics.
Here, there are slightly smaller consumer loans that do not require the very large application process.
And then the maturity of the loan will also be shorter, so you become debt free faster.
If you go down to the bank and ask for a loan of 10,000 kroner for the new leather sofa that you have long had in your binoculars, you can easily risk getting a no.
Conversely, an online loan provider will not ask for your loan request. You can therefore finance consumption completely without specifying any kind of justification.
Interest-free financing – is it possible?
As a starting point, no financing options are completely free. However, that said, you can find online loans that give you interest-free financing the first period of the loan.
You probably know interest-free financing from electronics stores or furniture chains that offer financing for non-interest consumer goods.
If you are looking for financing from online loan companies, you will find that you can also take up smaller loan amounts completely free of interest for a total of 30 – 60 days.
Here it is just about examining your possibilities on the web, and from there choose the interest-free financing that best suits you.
Also, be aware that when the cost-free period expires, you must pay interest and fees for the loan as normal.
Financing with or without security
When you take out a loan at the bank, you will often be asked to provide some form of security. In this way, the loan provider can make sure that they get the money back if you cannot repay the loan.
As you place car, housing or other values as collateral for the loan, your interest rate will also be lower than if you took out a loan without a guarantee.
But it may actually be beneficial to choose a loan without collateral.
If you do not want to lose your belongings, you can find online home and car financing where you avoid pledging assets.
Here, your interest rate will typically be slightly higher, as it is the only form of security that the loan provider requires of you.
Financing: Requirements and conditions for you
As a starting point, most people can make use of online financing to be able to afford their desired purchase.
Depending on the amount of money you want to fund, your loan provider will make an assessment of your credit.
Online loan companies collect credit information from you from SKAT when you sign your application with your NemID.
From here, the loan provider can assess your income and debt ratio to make sure that you are creditworthy enough to be granted a loan.
Often, it is your credit rating that ultimately plays a crucial role in raising a loan.
Often you are asked a lot of personal questions in the bank, which can result in a long and time-consuming process.
At an online lending company, you usually only have to meet requirements in connection with age, residence, debt and income.
The following requirements must be met:
- You must either be 18, 21 or 25 years of age depending on the provider.
- You must have a fixed income and a Danish bank account.
- You must have lived 12 months in Denmark.
If you can check these requirements, your online car, house or consumption financing is just a click away.
Financing and your interest rate
When you need to apply for a loan, there is one very important decision you have to make: Should interest rates be fixed or variable?
There are advantages and disadvantages to both choices.
If you want a loan that comes with financial security and without surprises, you must choose a loan with a fixed interest rate.
This ensures that interest rates do not rise or fall if interest rate hikes occur.
The good thing is that the loan can never be more expensive than agreed – but it also means that the loan will not be cheaper if interest rates fall.
The security that you get with a fixed rate loan means that interest rates are often slightly higher than the interest rate on a floating rate loan.
If you would like the opportunity to get a lower interest rate during the term of the loan, You can choose a loan with a variable interest rate.
A loan with a variable interest rate means that your interest rate changes in line with the market rate. If interest rates rise, your loan costs more – and if interest rates fall, the loan becomes cheaper.
It is often a little cheaper to take a floating rate loan, as you as a borrower have a greater risk of your expenses rising.
The advantage of a floating-rate loan is that if the market interest rate falls, your loan also becomes cheaper. It can even be cheaper than the fixed rate .
For a variable loan, the interest rate is adjusted at short intervals.
So, if your loan has a short maturity, it may be a good idea to take out a variable rate loan as the risk of large fluctuations within a short period is less.
Calculate financing: How much can you afford?
If you need a purchase funded, it is a good idea to use a calculator where you can get an overview of what the loan will cost you.
This ensures that you are not in a nasty situation when you have signed the loan and need to repay it.
Don’t forget to put a budget over your finances! This is how you ensure that you have a sufficient amount of available money to pay off loan payments and your other expenses.
It is of no use that you can afford to repay your loan, but then can’t afford to get gas in the tank of the car.
The same goes for housing finance . Often, the extra outside costs are higher than the home loan itself. You should therefore not ignore these expenses.
Cheapest financing: Remember to look at APR
When you want to find the cheapest loan for financing either your new car or your new property, it is important that you do not stare at the interest rate.
So you must not forget all the other costs that belong to the loan.
It is therefore important that you also look at the loan’s APR when you want to find the best financing for you.
APR stands for Annual Percentage Costs, which shows you how much you have to pay each year when all interest and borrowing costs are included.
As can be seen from the Danish Competition and Consumer Agency’s website , all loan companies must disclose the APR if they offer a specific loan.
The APR therefore includes all the loan expenses as interest, foundation costs, administration fees and the like.
It is especially important, with loans with longer maturities, that you compare the APRs, as this is a good indicator of the individual loans’ total price on an annual basis.
In order to ensure you the most legal comparison, you must always start from the same loan size and maturity.
In addition to the interest rate and APR, you should also consider other loan terms, such as interest-only and maturity.
How to get more insight into which financing solution is best for you.
Is there room in your budget for online financing?
One of the most essential considerations in connection with the admission of a loan should concern your finances.
Can your budget hold for the extra monthly expense a loan entails? Or is your availability not large enough to pay off the loan?
Applying for a loan cannot be worthwhile if you know from the outset that you are unable to repay the money.
It is important that you sit down and look at your private consumption so that you get a clear overview of your finances .
In this way you get insight into much you have left over every month to pay off the loan.
Of course, the disposable amount varies from person to person, as they depend in part on how much you earn each month.
Consumer Council Tanke recommends that the available amount per. month minimum should be:
- DKK 5,000 for an adult
- DKK 8,500 for a couple
- + 2,500 kr. Children living at home
If your monthly allowance is significantly lower, you should consider how you can save on everyday life and obtain a larger income.
Hereby you have greater chances of being able to cope with the loan’s monthly service – and at the same time you significantly increase your loan chances.
Find the best funding for you
It is important that you carefully consider the pros and cons before borrowing.
It will be a shame to take out a loan that you cannot afford and thereby just to make you even more debt.
You must of course listen to your financial advisor – but in the end it is your choice.
My best advice is to make sure that your finances keep paying off on a loan.
Remember! Whether there is a small loan of DKK 5,000 or a large sum of DKK 500,000, it is not a decision you should not take prematurely.