What you should consider when taking out a loan online - Tips & Advice

Are you dreaming of a new car? Or maybe you need some extra money for your wedding or are you planning to start a family? An online personal loan can be the exact financial solution you need to fulfill your wishes.

Taking out a loan online can be a big decision to make, so we've compiled a list of the most important things to consider before applying.

Do I meet the requirements to qualify for a loan?

The first thing you should consider is whether you meet the Ekonomi minimum requirements to qualify for a personal loan. The basic requirements are as follows, but note that the requirements may vary depending on the lender:

  • You are 18 years or older
  • You have a regular income
  • You are permanently resident in Sweden and have Swedish citizenship

What will the loan be used for?

The next step is to think about what you want to use the loan for. There are many different types of loans on the market so it is important to choose a loan that suits your situation and what you intend to use it for. The most common are:

Private loan without collateral

An unsecured personal loan is a loan offered without any collateral for an asset, such as a car or a house. This type of loan is often used for travel, weddings or debt settlement and although it has a slightly higher interest rate than a secured loan, it gives you the freedom to borrow money without collateral.

Car loan

A car loan is an excellent way to buy a new or used car without having to spend a long time building up your savings. Car loans often have a lower interest rate than an unsecured private loan because the car is used as collateral, provided the vehicle is under 7 years old.

What are the interest rates?

An interest rate is an amount that the bank or financial institution changes in addition to the money lent.

When you take out a loan, you want to choose the loan that gives you the lowest possible interest rate. This will help you focus on paying off the money you borrowed rather than just paying off the interest that builds up. Of course, the type of loan affects the interest rate. In general, loans with collateral, i.e. backed by an asset, have a significantly lower interest rate than an unsecured loan.

What are the fees associated with a personal loan?

Each loan will have different fees associated with it. Charges to look out for include:

  • Setup fee
  • Service charge
  • Early installment
  • Early repayment
  • Late fee
  • Insurance
  • Interest

Make sure you take the time to consider these fees when deciding on the type and term of your loan to avoid unnecessary expenses.

What is the term of the loan?

The length of your loan determines your repayment amounts and how much interest you end up paying during the term of the loan. The longer the loan, the lower your monthly repayments will be. Most personal loans can range from 1 to 7 years.

How are you going to pay it off?

This seems like an obvious point but it is important to plan how you intend to repay the debt. Will you pay weekly, bi-weekly or monthly? Do you plan to pay it off earlier than the maturity? These key factors will help you choose the right loan to ensure you avoid unnecessary costs.

By considering these points, you can plan and equip yourself with all the necessary tools you need to make the right decisions for your needs and be confident that you are on the right path to achieving your financial dreams.

What is an online loan?

An online loan can come from either an online-only lender or the online division of a more traditional lender. These are often unsecured personal loans, but you can get other types of loans online as well.