In Norway, taking out consumer loans or personal loans, including no credit check loans is common because Norges banks are highly regulated by the government. Norwegians are confident that their government will protect them from any unreasonable conditions that could put the welfare of their household at risk.
As a matter of fact, when personal loan availments became popular in Norway in 2018, the government-run research agency known as Sifo Research International a.k.a SIFO, a.k.a. Norwegian Institute for Consumer Research, conducted studies to find out how Norwegians spend the borrowed money. In order to understand why personal loans are trending in Norway, the Norwegian government took interest in knowing the reasons why its citizens are taking out short-term, high cost loans.
SIFO Study Reveals the Most Popular Reasons Why Norwegian Citizens Need Extra Funds
In Norway, for as long as an individual is gainfully employed and has been a Norges taxpayer for at least 3 full terms, whilst permanently residing in Norway and at least 23 years old, he or she is eligible to apply for a no-collateral consumer or personal loan; or even a no credit check loan. The most popular purposes stated as reasons include the following:
To Purchase a Used Car – Most Norwegian consumers purchase used cars by taking out personal loans instead of entering into dealership contracts with a used-car seller, or a private financing firm of brand new car dealers.
To Fund Home Renovation or Home Improvement Projects – Not a few Norwegians are keen on making improvements or upgrades to their house based on the popular (but still debatable) notion that doing so increases the value of their home
To Pay Equity or Deposit on a Real Estate Mortgage Loan – Inasmuch as making monthly mortgage payments on a house poses as a better option to making monthly rental payments, many Norwegians who eventually found their dream homes,took action to purchase the real property. However, the Norges housing market requires property buyers to pay at least 15% down payment as equity on the mortgage value of the loan.
To Spend for a Vacation or Extended Travel – The SIFO survey revealed that nearly 17% of those who responded, had borrowed money by way of personal loans to finance a vacation trip or an extended travel. ,
To Refinance Overdue Credit Card Obligations A great number of those who responded to the SIFO survey indicated that they used their personal loan in connection with a debt restructuring scheme. This refers to a lending method of consolidating overdue credit card debts into a single loan; offered to those encountering difficulties in settling several small, high cost debts . Restructuring however requires making a large payment in order to reduce the monthly amortizations into a smaller, more manageable amount.
Concerns Over Ballooning Household Loans Due to High Interest Rates
Based on the SIFO study, it was noted that many households were trapped into signing up for personal loan deals that stipulated unreasonable interest payments. As a means to prevent personal loans from ballooning into bigger obligations that households cannot afford to pay, the Norwegain government took action by putting a cap on the interest rates that banks will impose on consumer or personal loans.
On the other hand, Norwegian citizens were reminded to make a careful study of personal loan options by obtaining a “Liste av lån uten kredittsjekk” (List of Loans Without Credit Check). That way, they can compare the interest rates and terms offered by different banks as a means to making better decisions when planning to enter into a personal loan contract.