Different types of loans
If you need to take out a loan, you have a lot of different types to choose from, as there are several types of loans that are adapted to the different needs that the borrower may have. Fast loans are smaller, unsecured consumer loans that must be repaid after a short time. Private loans are somewhat larger consumer loans, which have a much longer time to repay. Mortgage is a loan where the bank takes the mortgage as collateral, and where you have to have a cash deposit yourself in order to get the loan granted. A car loan is similar to a mortgage, since you also have to provide a security for the loan here, and these loans can help you buy a new car if you do not have the entire amount yourself.
Quick loans are a fairly new type of loan, which also goes by the names of SMS loans or micro loans. This means that you borrow a smaller sum, which is usually one or a couple of thousand notes, which must then be repaid within a month. Fast loans require no complicated application processes and no security, but on the other hand, a credit report is usually taken so that the lender can see that you have no debts to enforcement authority. Fast loans have received some criticism for the high effective interest rates, but an effective interest rate is the total interest rate for one year. However, quick loans must be repaid significantly faster than that, and thanks to the small loan amounts, interest costs are usually still manageable as long as you pay off the loan on time.
A private loan, or blank loan as they were previously called, is a consumer loan that can be taken out without collateral. The application process is quite simple, but there are some requirements that must be met. For example, you must be over 18 years old, have an annual income of at least $200,000 and have no payment remarks or debts with enforcement authority. When you take out a private loan, you can usually borrow between 20000 up to $350,000, and how much the bank or loan institution grants you depend on your income and your ability to pay. However, you do not need to tell the lender what you want the money for.
A mortgage loan is usually the largest and most important loan you take, as it is difficult for most people to buy their own home with their own money. The application process for a mortgage loan is a little more complicated than for a private loan, for example, you have to have a cash contribution of at least 15% as the banks only lend 85% of the value of the home. Recently, a new law has also been introduced in Sweden which means that all mortgages must be repaid, and therefore the repayment must also be included in the borrower’s budget when the bank decides whether the loan will be granted. After being notified by the bank that you meet the requirements for a mortgage, you get a loan promise and can start looking at housing. If you then win the bidding on a house or an apartment, you can submit information about the housing to the bank and then they refuse or approve the final loan application.