Loan in Denmark

With a wide variety of loans in Denmark available, most credit and loan markets offer standard loans that are not tailored to the individual needs of the customer. But if you’re on the lookout for a certain loan then picking the right type of loan and service is of the utmost importance.

Standard loans are more affordable than personalized loans and provide a cheaper and better variety of products, every loan provider tries to offer cheaper and better products in an opportunity to compete with one another. Standard loans help boost transparency which helps customers quickly decipher the pros and cons of the same and pick one that is most suited to them.

Types of loans in Denmark

Whether you’re a local or an outsider, applying for a loan is pretty simple as long as you fulfill certain criteria – you need to have a fixed address or location in the country, a stable source of income, good finances, have a Danish bank account along with a professional job and you need to be above 18 years of age. Once this is fulfilled you can apply for a loan. Loans are of different types and depending on your requirements, here are a couple to choose from.

Cash Loan

Cash loans are when the amount is given to the borrower in cash. The lending bank takes into consideration the amount and price of the bond and minuses it from the amount. It is important to remember here that you would have to repay the entire amount in instalments during the agreed loan term. The longer the borrower takes to pay it back, the higher the loan rate.

Bond Loan

This particular loan taken by borrowers is based on bonds. The lending institution determines the price of these bonds and the amount that has to be disbursed to the customer, this is done according to the NASDAQ Copenhagen. And the customer needs to keep in mind that the loan amount nearly always lower than the bond amount.

Student Loan

As a student, there will come a time when you will experience a money crunch and require to go in for a short-term student loan. This loan will get approved in a couple of hours and the good thing is that it can be done online at a lower interest rate as well as a lower fee when compared to other traditional loans that you can get in Denmark. One very important thing you need to understand about loans is that you need to be careful about paying it back, if you default the rate and feed can be exorbitant. Student loans come as SU Loans, which have a longer application and approval, and quick student loans, which you can easily get online at affordable rates.

The student short-term loans can be taken and you can take 15 years to pay it back until one year after graduation, this ensures that you have ample time to pay it back either monthly or altogether. If you have used up all your SU but want to go in for higher education, you can avail of a complete loan in your last year of higher education.

Private Loan

Private loans are taken by individuals who need quick access to money for buying a house or investing in property and want to avail of the same without having to go to traditional lenders of financial institutions. If you have a poor credit score, you can get a loan from a peer-to-peer platform which could be a great option – an individual who has low credit scores are normally denied any type of loan and don’t know where to go when they need money quickly and urgently. Thankfully there are still institutions in Denmark that provide loans to even people with low credit scores – but make sure you pay it back and keep up-to-date with the payments in order to avoid further action.

Car Loan

As an outsider or local in Denmark, owning your own car is a big plus point as you can travel and commute on your own terms. Many people take a car loan as very few can actually afford to buy their own. You can avail of two types of car loans in Denmark, a secured car loans and an unsecured car loan. In a secured car loan, your car is collateral, which is pledged to the lender, if you fail to make your payments, the vehicle is taken away and the seller will sell the car in order to make up the amount.  Secured car loans are cheaper as there is collateral available and it reduces the risk on the lender. However, in an unsecured car loan, you don’t need to pay a registration fee which is mandatory in a secured car loan.

Quick Loan

Quick loans come with a variety of options and you can take a secured or unsecured loan either from the bank or from private loan companies in Denmark. The demands made by banks are quite high and will only be possible if you have a high fixed source of income. Unsecured loans are fast and not very demanding and people can take a loan between DKK500 and DKK400.000. You need access to the internet and your Nem-ID for the same – a loan can take a few minutes to a few hours to complete, depending on the options and you will receive the money into your account within a day or two deepening on the lender.

When applying for fast loans you need to be realistic and take into consideration the amount, time to pay it back, and interest. The longer you take the more the interest will be and it can make it impossible to take on a loan later (especially in the bank). Banks give first preference to customers who have a high credit score, make timely payment, and have never defaulted on a loan. So, take as much as you will be able to pay off.

Final Words

These are some of the most preferred and popular loans which customers take on a daily basis. Always choose a loan based on your need and check online for what details and things need to be kept in mind while paying it off.