This is a question we have been asked several times and it is time for someone to bury this myth once and for all. There are dozens of consumer loan providers on the market. Some of the best known include Money Guard Bank, uComplett Bank, Ikaro Bank, Black Pocket Finance, Mordax, General Earn Money and Sansan Bank. Do any of these finance companies offer interest-free consumer loans? Unfortunately, the answer is as obvious as it really should be for most of us. No, there are no interest-free consumer loans on the Norwegian market. If it exists then we would love to hear about it!.
How does the bank make money?
If the bank was to borrow without money without paying for it how else would they make money. Like any loan, whether it is a mortgage, car loan, home improvement loan or consumer loan, you will have to pay interest on the loan. The interest rate will usually be higher for an unsecured loan than a secured loan.
There are, however, interest-free loans where you only pay interest. It may sound tempting, but it is not a very smart solution as the loan can be very expensive in the long run.
How is the interest rate on consumer loans?
The effective interest rate on Norwegian consumer loans varies widely from provider to provider, but it will usually be somewhere between 10-20%. Although the company markets that they can offer an interest rate of 8.6%, that does not mean that you will receive the same interest rate on your loan. The final interest rate you receive will always be determined after an individual assessment of you who is applying. In this assessment, the company will make a credit assessment and take a closer look at your finances. If you have solid income, good credit history and low debt then you will end up with a very attractive consumer loan.