Private loans – Comparison of interest rates, facts and links

When people think of a loan, it is usually a private loan that they think of. This is not immediately strange as it is one of the most common and classic types of loans.

A private loan is simply a regular loan with no frills that you can apply to in virtually all banks. For this reason, it is not uncommon for such a loan to be called a bank loan, but it is far from only banks that offer private loans. So do many other lenders and credit companies.

What is a Private Loan?

bank

A private loan is often also called a blank loan and it is a loan with no collateral. You can read further down exactly what this means. Many different types of loans are basically a private loan because it is simply a loan to a private person where you do not need to provide any security.

There are some things that can be good to know about private loans and we will go over them below. It is about how much you can borrow and some other conditions.

loan Amount

A private loan is usually available in the range of around USD 10,000 and up to about USD 350,000. It is very uncommon for someone to lend larger amounts than that. If you need more money, this is another type of loan you can look at.

There are some lenders who lend smaller amounts, perhaps all the way down to USD 1000. SMS loans are really a form of private loans and there you can borrow small amounts, but the limitation we usually do here on the page is that a private loan is a loan you can take for at least 12 months while an SMS loan or micro loan has a shorter maturity. Today, it is more common for lenders to lend small amounts such as USD 1,000 – 50,000 with a maturity of up to five years.

payback

The repayment period on a private loan usually lies somewhere between 1 and 12 years. The length of the repayment period you want on the loan is largely determined by yourself when you apply for the loan. Your financial situation also usually affects how long you can borrow. If you have good finances, you can be offered longer maturities than if you have a bit of fluctuating finances.

The longer the repayment period you choose, the more expensive the loan will be in total because you will then have to pay interest for a longer period. Be sure to make a careful calculation before deciding on the repayment period. With a long maturity, the cost becomes lower every month, which can be an advantage, but overall you pay more for your loan.

Loan terms for private loans

Loan terms for private loans

There are usually a number of basic conditions with most banks and lenders. It is always required that you are at least 18 years old and sometimes there are sometimes certain requirements that you are registered in Sweden since a certain number of years back.

In principle, you must always have an income which means that you have the opportunity to repay the loan within the stipulated time. This income can vary – sometimes it is around USD 100,000 / year and sometimes up to USD 150,000. The most common, however, is that the requirement is USD 120,000 in annual income. It is very unusual for private loans where you may have payment notes. If you have these, you are usually denied or at best can only borrow smaller amounts.

Credit check before loan

When you apply for a private loan, a credit check is always done to see how good your finances are. There you look at income, old loans and credits, assets, payment notes and the like. Based on this information, the lender determines whether they believe you have a sufficiently good credit rating to take out a private loan.

The requirements for taking out a private loan are higher than many other types of loans. These are higher requirements than for micro-loans, as these are usually clearly larger loan amounts. There are also higher requirements than for example mortgages because mortgages have security in the form of your home, which reduces the risk to the lender.

Private loan – A loan without collateral

bank

You can read more about unsecured loans on our site that deals with this very subject. In simple terms, however, this means that you do not offer the bank anything that they can repay unless you are able to repay the money to the bank. As there is thus a greater risk for the bank, they will normally protect themselves by having a higher interest rate on private loans.

However, it is important that you pay off your loan – otherwise the risk is that you will receive even greater debts due to, for example, interest rates and late fees.

The alternative to a private loan or unsecured loan is a secured loan. This is, for example, a mortgage loan or a car loan where your home or car is used as collateral to repay the money to the lender according to agreement. In these cases, the loan is often cheaper as it is less likely that payment will not be complete.

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