Norway’s economic and credit system has significantly evolved over the years. For clarity, this is a nation that has proven to be one of the best at operating a cashless economy. For example, no more than 5 percent of transactions usually involve physical cash exchange.
Furthermore, debit card ownership is at an astonishing 98 percent. This Scandinavian country is indeed one of the closest to a cashless future. You can click here for more information on this.
The open-minded integration of technology by key players is largely responsible for this. Technological integration is also responsible for how quickly loans can be requested, approved, and funds disbursed. Such is the case with same-day loans, as the name suggests.
Considering that some people are not too familiar with this kind of loan (despite its popularity), it would not be out of place to share some facts about it. So, keep reading to learn more about this kind of credit line.
What Are Same-Day Loans?
They are short-term and high-interest-rate credit lines that can be secured very quickly. Besides their short-term repayment plan, high-interest rate, and the quick pace at which they can be obtained, comparison with traditional loans is one of the best ways to truly understand them. To this end, here are some of their features, especially as it concerns how they differ from traditional loan options:
Application Process
Its application process usually takes place online. The possibility of sorting out verification with BankID and other technological features makes this very possible.
Its creditors have a history of performing a wishy-washy credit assessment or no assessment at all. This is usually because of the high interest rate that it usually commands.
However, there are now fiscal policies that forbid them from operating this way. Regardless, their credit check can be categorized as mostly soft, as opposed to how it works with many other unsecured consumer loans.
Loan Amount
These are usually loans involving small amounts, which is why many of these lenders perform a soft credit check. This is besides the fact that the interest rate is pretty high.
Speaking of the loan amount, these credit lines are just designed to attend to immediate and short-term needs. So, that is reflected in the borrowing limit as people who need access to larger amounts may have to consider other credit options.
Approval & Disbursal Speed
The process of approving the loan and disbursing the funds (if approved) happens quickly. All of these processes can play out within 24 hours.
However, fiscal regulations that mandate creditors to perform credit checks are a reason this process can be slowed down a bit. Be that as it may, it is still safe to say that the processes are fast.
Besides technology’s role in making this happen as pointed out earlier, there is less paperwork involved. This is also a factor in how fast these loans can be secured. The same cannot be said of traditional alternatives as the application process can be quite extensive.
Usage
Borrowers are at liberty to use the borrowed funds as they wish. However, these funds are usually for attending to immediate needs due to the nature of how they are secured. Some common projects that they are used for include:
- Car Repairs
- Utility Bills
- Minor Business Emergencies
- School-related Expenses
- Home Repairs
- Emergency Travel
Of course, these funds may go into servicing other immediate or short-term needs. The point remains that borrowers are free to use them as they deem fit. However, this is not a license for irresponsible use of these credit lines.
Lenders
Several lenders offer this kind of loan. Payday lenders, online lenders, and even credit unions are high on the list.
Furthermore, some practices are more common with certain lenders than with others. For example, payday lenders are more likely to demand higher interest rates than credit unions would demand. On the other hand payday lenders would most likely be more willing to offer these loans to interested applicants as they have a more commercial interest.
People who require this kind of credit line are better off knowing their options. You can visit https://billigeforbrukslån.no/lån-på-dagen/ to know some of the available options. This would go a long way in making an informed choice, especially as it concerns choosing the right lender and offer.
Types of Same-Day Loans
There are several kinds of these credit lines and they are all designed to offer suitable credit services to people in specific financial situations. Common types of same-day loans include:
- Payday Loans
- Online Loans
- Personal Loans
The subsequent part of this section discusses them.
Payday Loans
They are meant to offer credit lines for immediate needs until the borrower gets his next pay when repayment should happen. This is why they are called “payday”. Some of the key characteristics of this credit line include the following:
- Repayment Period – It is usually between 2 – 4 weeks, which is enough time for the borrower to get paid and repay
- Amount – The amount that can be secured is usually between 1000 – 15000 Norwegian kroner
- Interest Rate – The effective interest rate can go for as high as 300 percent. However, this is equally subject to pertinent fiscal policies that place caps on interest rates
- Eligibility – Income and employment status are mostly the focus of lenders
The application process is quick and simple, as is the case with many other same-day options.
Online Loans
This is a broad category that could even include some personal and payday loans. However, the common ground is that they are secured online and designed to be quickly accessed. Some of the key characteristics include:
- Repayment Period – It has a broader repayment time frame as repayment plans can be as long as several years. It is a few weeks, at the very least
- Amount – It is hard to put a range as this depends on the actual kind of online loan that is secured. However, it can be in the range of payday loans and a lot higher than that
- Interest Rate – The actual kind of online loan also determines interest rate
- Eligibility – Some lenders are more stringent as they perform a more thorough credit assessment. So, there is the chance that certain applicants will be denied on grounds of not having a good credit rating
The application process happens entirely online. Furthermore, approval and fund disbursal can happen within hours.
Personal Loans
They share many similarities with the aforementioned options, except that they are more suitable for larger expenses. They are also usually more suitable for people with good credit scores. Some of its key characteristics include:
- Repayment Period – It has a longer repayment period than the other options. The repayment period is often between 1 – 5 years
- Amount – Eligible borrowers can get as much as 15,000 – 600,000 Norwegian kroner. This largely depends on the lender’s borrowing limit and the borrower’s creditworthiness
- Interest Rates – The interest rate turns out to be a lot lower than payday credit lines. Its maximum effective interest rate is usually around 35 percent, while its minimum is around 5 percent. The actual effective interest rate is determined by the borrower’s creditworthiness, loan amount, repayment period, and lender’s policy
- Eligibility – Its credit checks are a lot more thorough than payday credit lines. This is not unexpected considering that it commands a lower interest rate than payday options and could even offer funds that payday credit lines cannot offer
Its application process is a lot more demanding than the other options. This is because more documentation is required. However, everything can play out quickly if the right information is provided and the applicant is eligible.
General Eligibility Requirements for Same-Day Loans
A bit has been said about the eligibility requirement for same-day loans and it has been mostly about having an acceptable credit rating. However, there are other requirements and they include:
Age
People outside a certain age bracket are not considered eligible. Nationally, an applicant has to have clocked 18 years to be considered eligible. However, some lenders further raise the bar as applicants must be at least 20 or even 23 years old.
Residency
It is either the applicant has Norwegian citizenship or a permanent residency status. There should also be proof of address to back any of these up.
Bank Account
A valid Norwegian bank account has to be provided. The disbursed funds are supposed to be sent to this Norwegian bank account if the application is approved.
Income
Lenders may go about this in either of two ways. Some have a minimum threshold for expected income. On the other hand, some expect applicants to have a regular income status.
Identification
Valid identification documents have to be provided. Prime examples include a National Identification Card, driver’s license, and Norwegian passport. These are documents that are proof of identification in Norway and it is worth mentioning that some are peculiar to certain individuals.
Contact Information
A valid email address and phone number are at least required. This is both for verification and communication purposes.
In Closing
Many people take out same-day loans but some of these people are not making an informed decision. This is because they do not know enough about this kind of credit line, which is why this article has addressed this subject.
Taking note of the details shared here ensures that you make the right decisions when it comes to securing same-day loans. So, bear them in mind going forward.