Loans in Finland are available from a range of commercial and co-operative banks. The key to finding affordable loans in Finland is shopping around extensively before deciding where you should apply. We believe that comparison-shopping online is the smartest way to find a loan of any type in this Nordic nation. For example, you should be looking for the most attractive interest rate, the best repayment terms and the most reasonable fees. When you find a reputable financial institution which offers the right loan conditions, it will be time to contact the bank's representatives, set up a meeting and then make a formal loan application.
Types of Loans in Finland
Home loans are one type of loan in Finland. At present, interest rates are very low, so the cost of servicing a mortgage loan will be very low. However, most mortgages which are granted in Finland are variable types of loans, which means that your monthly payment will fluctuate if interest rates go up or down. It's important to be aware that interest rates may not always be as low as they are now! If they do rise, you'll need to have enough monthly income to handle the higher loan payment. If you want more predictability and stability, consider a fixed mortgage loan with a long amortization period. For example, you may lock in at a specific rate for twenty years. This fixed interest rate of long duration means that you won't need to worry if interest rates go up. The downside of this is that your payment will remain the same, even if interest rates drop.
To compare, the April 2017 average interest rate for a 15-year fixed mortgage in the USA is 3.14 percent. This is quite a bit higher than Finland's average interest rate. So, it's safe to say that homeowners in Finland do get a break when it comes to the cost of servicing mortgage loans. This is why home ownership in Finland is often the most cost-effective way to live well.
However, many homeowners in Finland do carry a lot of debt and this means that some may be in trouble if interest rates rise. They may have trouble meeting their mortgage loan obligations if they have variable-type home loans. This type of scenario often triggers "housing crisis" situations all over the world and Finland is no different. It is something that the banks in the country keep tabs on and something that the Finnish government keeps tabs on. In addition to home loans, personal loans and business loans are available. As well, residents may access credit cards and/or lines of credit.
The interest rates for consumer credit within the country do fluctuate. During September of 2016, the average rate of interest for consumer credit was 4.40 percent, versus 4.46 percent during the same month of the previous year. As you can see, interest rates for consumer credit are much higher than interest rates for home loans!
Know Your Credit Score
Before you apply for a loan, you should get organized and have a handle on your own financial picture. This means knowing your credit score and gathering paperwork which details your monthly income, your monthly expenses, your assets and your debts. Your credit history will play a role in whether or not you are approved for a loan. Banks definitely run credit checks on loan applicants in Finland.
According to the Finnish Competition and Consumer Authority, bad credit happens when consumers neglect to make payments on debts or bills. Delayed payments will not typically negatively impact a credit score. However, certain things will negatively impact a credit score, including lack of payment for a longer time period, such as sixty days or more, or a court-issued verdict which orders the consumer to pay off an outstanding financial obligation. As well, if a consumer is classified as insolvent, this will lead to a lower credit score. Also, anyone who has been granted debt adjustment, whether voluntarily or involuntarily, will find that their credit score gets worse. In terms of the overall consequences of a poor credit record, a consumer with this issue may be turned down for a loan. Also, credit cards of that consumer may be cancelled and installment-plan contracts for credit may not be accessible. In addition, renting an apartment in Finland may not be easy.
Negative consequences of a bad credit report may extend to troubles getting hired, particularly if a desired position requires financial responsibility. Information about bad credit record entries is gathered by the country's premier credit data firm, which is Suomen Asiakastieto Oy. The company will send out a notification to someone who has gotten a first poor credit entry on his or her credit record. The bad credit entry will typically remain on a credit record for two to three years. If more bad credit issues arise, the time that a bad credit entry sticks around on a credit record may be extended. If debts registered as bad credit entries are paid in full, the time period that the related bad credit entry remains on a record will generally be two years, which is the minimum.
If you pay off a debt which triggered a bad credit record, make sure that your payment is noted in the register. Doing so may help you to get a loan in Finland in the future. Be aware that you're permitted by law to ask for an extract from the register for credit information once annually, via the credit data firm. This is worth doing, especially if you plan on accessing credit in the foreseeable future.
It's good to know what banks and credit unions in Finland will see when they run a credit check on you. It will help you to be more realistic about your chances of accessing credit. Also, if you have bad credit entries, you may take steps to improve your credit score in the future. You may put good credit after bad.
According to many experts, the most affordable loan company is www.nettiluotot.fi. The lending loan comparison Kulutusluottoa24.fi is a solid online resource for those who want to find credit in Finland, and we recommend checking it out today.
Why pay more than you have to for credit?
How to Comparison-shop for a Loan
First, you'll need to check out banks in the country. It's actually easy to access a complete list at this link - https://en.wikipedia.org/wiki/List_of_banks_in_Finland
Just utilize the list in order to check out the options. You'll find that each bank name is a link which should take you directly to its official website. The Bank of Finland is the nation's national bank. However, a wide assortment of banks offer loan services to customers, whether they are government, commercial, savings or co-operative banks. When you visit official websites of banks that you are interested in, you may check out their loan terms and learn how to apply. Usually, meetings with loan officers at these banks will be required.
Finnish Credit Union Limited offers free online loan applications services and many other financial institutions in the country may also provide this type of ultra-modern and convenient service. If you're not interested in meeting with loan officers face to face, you will benefit from choosing a bank which does provide online services. Bear in mind that at some point in the loan approval process, you may need to talk to a real human being. However, the bulk of your responsibilities as an applicant may be taken care of online.
Most banks will offer lines of credit, personal loans, conventional mortgages, mortgages of the high-ratio type and home buyer's plans. Services may vary, so look around and gather information. Your goal should be to apply with a trusted bank which offers the most affordable interest rates and fees, as well as repayment terms which suit your own financial circumstances. We recommend comparing at least three banks before making a final decision about where to apply.
Look for a Loan Provider Today
Interest rates for credit in Finland are quite reasonable, although banks are currently rather cautious about who they approve for loans. If you think that you have a decent credit score and sufficient resources to repay a loan right on time, then your chances of finding an affordable loan in Finland will be very good.
The more research you do before you apply, the better! Also, be sure that you understand every facet of your financial responsibilities with regard to a loan agreement before you sign on the dotted line.
Since Finland does have so many reputable banks, it's a great place to seek out a loan. While getting a loan as an expat may be a bit harder, it's not impossible. If you are an expat and your Finnish is not fluent, you should get all loan documents translated into your native language before signing anything. It's vital to understand a loan agreement inside and out and this will be easier when you may read it in your own language. In particular, this advice will be important if you want to get a mortgage loan, which is undoubtedly a big financial responsibility.
Edited by Alicia Young