Are you thinking of renovating the house or buying new furniture, but it is empty at the checkout? Then there is a possibility to apply for a private payday loan – a loan you can use for whatever you want.
Before applying for a private payday loan, we recommend that you go through a number of steps to ensure that you get the best possible terms on your loan.
How is the interest rate determined and how quickly is the loan paid out?
The interest on your private loan is always set individually based on your particular financial situation and your application parameters. It is therefore important to have a well-balanced view of how much money you need to borrow and how quickly you can repay them. Otherwise, the lender can judge that the risk is too high to lend to you and the interest rate is thus higher, or you can even refuse to borrow.
How quickly a private loan is paid out is entirely up to the lender and depends on how their internal processes look and how quickly you can sign the debt bond. So it can be good to compare how it looks with different lenders if time is an important factor.
Before you consider taking out a private loan, we think you should review the points below:
Tips to help you get lower interest rates on your private loan:
- Borrow as little money as possible – the higher the loan you apply for the higher the risk it is for the lender and the interest rate is then generally higher. The rule of thumb should always be borrowed as little as possible and pay back as quickly as possible.
- Compare private payday loans to find one that suits you – It is important that you read on and set different lenders against each other. First and foremost, it is important that you meet the basic requirements that the lender has, otherwise you will automatically be denied loans. These usually include: age, income, employment and how long you have lived in Sweden.
- Apply for a quick repayment period – If you have the opportunity, apply to repay the loan for 2 – 5 years. So we recommend that you live a little bit harder during a period when you raised the loan so you can repay the loan faster. It normally gives lower interest rates and that your total interest payment to the lender becomes lower. It may also be possible to change the repayment period during the loan period if you contact your lender.
- Use a loan broker – if you use a loan broker to compare private loans, only one credit report is taken. The fewer credit reports you have taken out, these are reflected in your credit report, the lower the risk = lower interest rate. You can easily sort between different loan intermediaries.
- Compare the lender’s fees – in addition to the interest, many lenders also charge other fees such as lay-up fee or administration fee. Be sure to include these in your calculation as it is the total cost that is relevant. These fees are particularly important to check for smaller loans, as they are normally of a non-recurring nature.
- Lower interest rates with higher income – Do you know you should get a pay rise? Then it may be worth waiting to raise your private loan. A higher income assesses the lender as a strong factor in order for you to be able to repay the debt in its entirety. As a result of the estimated risk being lower, therefore, offer a lower interest rate.
If you have recently received a higher salary, you may need to supplement your application with your latest salary specifications – but the lenders / loan intermediary will contact you in such a case.
- Ending Unused Credit – Do You Have Credit Cards or Account Credits That You Don’t Use? Then end these immediately. Even if the credits are not used, they are included in your credit report and are included in your total debt, which can give higher interest rates or limit how much money you may borrow.
- Your application becomes stronger with a co-applicant – you improve your loan application if you included a co-applicant who guarantees your loan. This can result in lower interest rates and higher loan space. Check with someone in your vicinity if he / she is able to help you with the loan. Note that it is important to inform that the person in question becomes accountable and must enter your place if you do not pay off the loan.
- You can at any time repay all or part of your private loan – if you collect some extra money during your loan period: perhaps a bonus at work or that you sell a gadget you do not use – then use these to repay your loan. It costs nothing and you immediately lower the interest cost you pay to your lender.
So what’s really a private payday loan?
A private payday loan is a loan that a bank or financial institution exhibits without taking a mortgage on an asset, such as a home. Other terms for this type of loan are blank loans or unsecured loans.
A private payday loan generally has a shorter repayment period than a mortgage loan. The repayment / amortization period is normally 1 year to 15 years. The repayment takes place monthly and consists of an amortization component and an interest component. The most common is that the total amount is fixed throughout the loan period, which makes it easy for you to budget your finances.
It is also common for the lender to charge a setup fee and an avi fee if you do not use direct debit. When the interest rate is not tied up, you can repay all or part of your loan at any time.
Compare lenders and squeeze your interest costs
You can read more about private loans and compare different private lenders. There is more information about each individual lender and a smooth sorting service to find the best loan for you.