Many people apply for consumer loans and credit cards. According to figures from the Financial Supervisory Authority, people sent 3.5 million applications for consumer loans and credit cards in 2017. This is a 24% increase compared to the number of applications sent in 2016. That is, approximately every person over the age of 18 has submitted one. Applying for either a consumer loan or a credit card in 2017. That’s pretty much it. Of these 3.5 million applications for consumer loans and credit cards, 1.2 million applications were granted in 2017. In total, consumer loan debt is USD 115 billion.
When you take out a consumer loan, you are required to apply.
You must fulfill a number of requirements in order to be granted your application. In this post, we go through the minimum requirements that all banks and loan intermediaries impose on their customers to lend money. We look at five requirements: age, income, remarks, citizenship and address. There may be some nuances in the requirements, but we see that along the way.
When applying for a consumer loan or credit card you must be over a certain age. , you are of age when you are 18 years old. That is, you are an adult and your parents no longer have the formal responsibility for you. According to people law, you can decide yourself in financial and personal matters when you are 18 years old, and that you have all other rights as other authorities.
When applying for consumer loans or credit card loans, most banks and loan intermediaries require you to have an income. It is difficult to imagine repayment of the loan without having an income to repay the loan with. A few banks allow loan applications without showing you an income. The disadvantage of these banks is that you have to pay a higher interest rate than you would otherwise have done.
It goes without saying that you need a solid income to take out a large loan. If you have an income of USD 200,000 per year, you have an income of approx. USD 16,700 per month. After tax there is not much left. A loan of USD 500,000 with a normal consumer loan interest and repayment period requires a monthly payment of USD 7-10,000 per month. USD 200,000 does not go into annual income.
Payment notes and debt collection
When you borrow money, the most important thing for banks is to pay back the borrowed money each month, as agreed. , there is a good system for notification when a person who owes money does not pay. If you do not pay a bill, the creditor can send you clearings and after a while take the case to debt collection.
After a certain number of payments, a payment note can be registered on you so that anyone who takes a credit check of you sees that you do not always pay your bills on time. TV2 refers to statistics showing that 244,000 people have at least one payment note. When matters go as far as debt collection, it means that the bank can claim money from you through legal steps that allow the bank to take part of your salary or sell your assets to get their money back.
Banks and loan intermediaries are very skeptical about lending money to people who have payment notes or debt collection cases. Only banks that pledge real estate as a way of securing their loans lend money to people with such remarks and cases.
All banks that submit a claim must pay for the submission. The fee the banks pay is around USD 2,000. E24 reports that the state receives revenue due to this fee of approximately USD 830 million, and expects a revenue increase of 32% to around USD 1.1 billion in 2019.
Citizenship or residence
When you apply for a loan from a people bank, it is important that you also have a connection with Norway. Affiliation is necessary for the banks to be able to get their money back from you if you do not have the opportunity or want to repay the money. If you have foreign citizenship or live abroad it can make the money collection process slower and much more expensive.
All banks and loan intermediaries therefore have a requirement that you who apply must have people citizenship or that you must at least live for a certain period of time. How long you must have lived before you can apply for a consumer loan or credit card varies slightly from bank to bank. The shortest we have seen is a housing requirement of 2 years, whereas it is more common that you must live for more than 3 years.
If you wonder what it means to have a place of residence , it is first and foremost the population register address that counts. You may be abroad at times, but you must be registered in the people Population Register. If you are registered here you will also tax . Norway is an expensive country to tax. If you want to tax less or in other ways minimize your costs, other countries may be better off to live in. There are probably very few people who choose to live only to qualify as applying for people consumer loans.
In the section above, we describe the importance of citizenship and residence. Subsequently, address is also an important element that banks look at. When applying for a loan , it is also important that you have a people address. You can have people citizenship while living at a foreign address.
You can also live abroad and have a place of residence or be registered . Therefore, you who apply must also have an address that you can refer to. The address may not be a mailbox, but should in theory be a street address so that the bank can see that you are in a place . The bank needs this to send you information that you read, such as reminders and debt collection notices.
Create a budget
Our advice to those who want to take out a consumer loan or credit card loan is that you first and foremost clear the space for this loan in your finances. Start by meeting the minimum requirements mentioned above. Then you need to create a system to get an overview of your finances.