Consumer loans have become quite a common financial instrument worldwide. For the most part, this has led to a notable increase in loan applications and approvals. The fact that it can serve several purposes is one of the reasons for this.

For example, over a third of people who are granted this type of loan use it for debt refinancing and consolidation. This is followed by auto purchases and then comes sorting out business expenses. For more information on this, you can visit: https://www.budgetandthebees.com/.

As a result of how this type of loan can serve several purposes, it is not unusual to have people asking lots of questions about it. Answers to some of the common ones will be provided here. So, read on to find out more.

Who Can Secure Consumer Loans in Norway?

People who can secure consumer loans in Norway include those below:

Have Attained the Right Age

Generally speaking, the minimum age requirement is 18 years. This means that people under the age of 18 will definitely have their request declined. The reason is because they are legally considered minors.

It is worth mentioning that 18 years of age is the legal age limit. In other words, the law is against the practice of offering loans to people below this age. This is even if the lender is willing to do this. So, it is not within the right of the lender to offer credit lines to such people.

However, lenders have the right to raise the bar when it comes to age limits. For example, some would not consider offering loans to people under the age of 21 years. The most stringent ones raise the age limit to 25 years.

Have Enough Income to Repay Loans

Eligible applicants have to be gainfully employed. This is even if one is self-employed. What is important is the ability to repay the loan. To this end, the income status of the applicant will be cross-examined.

All lenders have limits in this regard, as well. This means that the applicant has to earn a certain amount of money annually, at least.

Of course, this largely depends on the amount of money that the applicant wants to borrow. However, the minimum that most lenders insist applicants must earn annually is 120,000 Norwegian kroner. Some more stringent ones require that applicants earn 250,000 Norwegian kroner annually, at least.

Are Validated Residents

The applicant must have a valid address in the country. In addition to this, the person must have resided in the country for 3 years, at the very least. Some very stringent lenders demand that the person must have lived in the country for up to 5 years.

Have Eligible Credit History

The person has to have a credit history considered eligible enough. Many lenders have credit score benchmarks. This means that people below such scores will likely have their loan request denied.

There are other related requirements. One such is how many lenders would not grant loans to people with highly questionable debt management practices. For example, people with active collection situations or payment notes usually find it hard to secure this kind of credit line.

How Much Can Be Secured with Consumer Loans in Norway?

The maximum amount that can be secured with consumer loans in Norway is set at 600,000 Norwegian kroner. On the other side, the minimum amount is mostly set at a thousand Norwegian kroner. For the most part, securing small and micro loans is usually less complicated than securing large sums.

Especially when it comes to borrowing large sums, there are factors that determine if the lender would grant such loans to interested applicants. Some of these factors include:

The Applicant’s Income

This is nowhere near surprising as the applicant’s income is linked to his/her ability to repay the loan if granted. For this purpose, people who request large sums will only see their request granted if they earn enough to repay the loan.

Debt-to-Income Ratio

It is possible that the applicant is servicing a debt or several debts as of the time of applying for the loan. The ratio of the existing debt to the income will be considered as well. The request will likely be declined if servicing the existing debt will adversely affect the chances of the applicant repaying the requested loan.

Lender’s Policy

Not every lender grants applicants who request large sums their request. Besides the aforementioned reasons, another reason is that some lenders only specialize in granting micro and small loans to applicants.

How Long Does It Take to Process and Grant Approved Loans?

The entire process of processing the loan can happen in far less than 24 hours. However, this also depends on the applicant. The reason is that the lender would have to get the approval of the applicant before starting the process of granting the loan. By the way, the process of granting the loan after approval from both the lender and borrower takes between 24 to 72 hours.

How Much Would Be Repaid Monthly if the Loan Is Granted?

There is no uniform or average amount to be paid by everyone who secures consumer loans in Norway. The amount that each borrower is meant to pay monthly is determined by the amount secured and the chosen repayment plan.

It might also interest you to know that there are tools that give you an idea of how much borrowers will have to pay. You can click here for more information on this. Of course, this would usually be based on the borrowed amount and the chosen repayment plan as mentioned earlier on.

Can Consumer Loans Be Secured with a Co-Borrower in Norway?

You are at liberty to choose between securing a consumer loan as a sole borrower or doing so with a co-borrower. However, the implications of securing this loan with a co-borrower need to be well understood. For one, the risks as well as benefits of applying with a co-borrower should be well understood.

Speaking of the benefits, the chances of securing the loan are significantly increased when you apply with a co-borrower. This is even if one of the parties is not eligible for the credit line.

As it pertains to the negative, each party is held accountable for what the other party does wrong. For example, imagine both parties were to make equal monthly payments. If one party pays and the other does not pay, the one that pays is still held accountable for the actions and inactions of the defaulting party.

To this end, it is advised that the decision to secure consumer loans with a co-borrower is well thought about. If you welcome the idea, make sure the other party is financially responsible. You also need to be financially responsible.

In Closing

Five common questions about consumer loans in Norway have been answered here. It is worth mentioning that while securing consumer loans is a possibility in many parts of the world, certain rules that apply to borrowers and even lenders are location-bound.

For example, credit checks have to be conducted before such loans are granted to applicants in Norway. To this end, you need to understand the rules that apply in your location if you need to secure this type of credit line.