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Here we will take a closer look at the borrowing of money without security, also called an unsecured loan. And where the money is not earmarked for a specific purchase. This is why APR becomes a key concept which we will come back to later. This goes for consumer loans, unspecified bank loans and overdraft facility, and so on. They are fast loans or quick loans in Denmark.
One of the most important figures to keep in mind when borrowing money is APR. This stands for annual percentage rate. This covers the total annual cost for having obtained the specific online loan with security. This means that the allocation between interest rate and fees is without importance.
APR is a function of the security for the loan and the security for an online loan is limited. And because the carried out credit evaluation is limited the APR for these kind of loans can be high. As a consequence of the lack of security This is due to the fact that people normally obtaining an online loan can be under average payers. And the fast loans are usually on low amounts.
This means that the people who actually complies with the conditions are paying for the people not complying with the conditions. So depending on the circumstances, such as being a student or unemployed with a good prospekt of getting a job, it can make sense.
If you buy on credit in a store, APR is once again the most important figure to keep in mind. The interest rates can easily be low or non existing. But if that is outweighed by higher fees or things like that, the low interest rates are offset.
Should you actually be able to buy on credit without any sort of extra costs, it can easily be a decent solution. But you just need to pay attention to which meaning it will have for your budget to pay the monthly/quarterly repayments. And if the store really is willing to sell on credit without any sorts of extra costs for the customer, they would probably also be willing to give some discount at cash payment.
Are you borrowing 10.000 kroner at 10% interest with repayment after 10 years. And are you only pay interest on the loan until repayment, you will end up paying 10.000 kroner in interest for having borrowed 10.000 kroner.
An overdraft facility is a standing amount a bank makes available for the borrower without a fixed repayment schedule. A fixed amount is agreed, 10.000 for instance, and of that you can use and repay as you should wish and need.
The APR is higher than for classic bank loans. But on the other hand you have the flexibility to use and repay the credit as wished and needed. This means that you only have interest costs of the money you actually use. For a standard bank loan you pay for the total borrowed amount disregarding the use. And you have fixed terms for when you have to repay the money.
For an overdraft facility you can also get high interest rate for your own money, as you save interest costs when you put money into the account and thereby draw less on the credit. If you spend more the the agreed amount, you account moves into overdraft. And then you will have to pay even higher APR than agreed at by account conclusion.
Hints for fast loans in Denmark
If banks do not wish to lend you money, you really need a valid reason to borrow money elsewhere.
Overdraft facility can be a flexible and cheap alternative to a standard bank loan, but it is of course better only to use money you have already earned.
Always repay the most expensive quick loan first.
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