Probing the loan market in Norway

The loan market in Norway is saturated with offers, but we can divide the market into different segments. The banks usually specialize in the various products. Still, this doesn’t mean you can’t find a bank offering one or all of them, though it might have an impact on advantages as we see with credit cards for example.

In this article we will point you in the right direction (at least in our opinion), but make up your own mind . After all it’s your money.

Housing loans

To even get considered as a housing loan customer you are required to have at least 20% of the funds yourself. That requirement is set by the government. In bigger cities this can be a challenge, at least for the younger generations, but this doesn’t necessarily mean you don’t have a chance to get into the housing market. 

If you buy a house outside the city perimeter, you can expect considerably lower prices (more than often) and with the rise in house prices the past many years, you can sell at a higher price after a few years. this will in turn give you the funding to move closer towards the city center. This is a common way to do it.

Housing loans you typically get from an ordinary bank* like DnB, Nordea or preferably Sbanken or the other banks that have offered competitive prices the past many years.

The maximum length of a house loan is usually 30 years.

*Ordinary banks are older institutions (banks) that have a huge majority of the customers and colloquially go under this denominator. Financial institutions do typically offer only consumer loans, credit cards and other loans without security – these are specialized in this market. Through the past years we have seen that also these institutions are broadening their product offers and some even offer mortgages, checking accounts, insurances etc. and operate like an “ordinary bank”. Still confused? So are we…

Car loan

Whether you buy used or new, you can get a car loan at fair prices. The cost of loaning the money will be depending on what type of loan you get. Some car loans are with a mortgage in the car itself while the other type is like a regular consumer loan. The latter is more common when you buy a used car.

The interest is depending on if you have a mortgage or not. Usually (in all cases) the interest is considerably lower when you have a mortgage on your car compared to a loan with no security.

A car loan you can get from various financial institutions., but here we can see that the ordinary banks often give you a lower interest, though higher requirements are often higher to you as a loan taker. This can mean for example that you need to be a regular customer and have your main financial obligations with them. Other banks like Santander are close behind. Furthermore Ya Bank (for example) can give you the lowest interest on car loans without security and does not require you to become a regular customer (having your checking account there etc.) and is an exception from the ordinary banks that do require a security with the loan.

The maximum length of a car loan is five years.

Personal loan

A personal loan is by definition a consumer loan in this context. These are loans that doesn’t require any security, either in property or whatever you use the money for. This is not without an exception though, because you can of course also get this type of loan with a security, but then you would typically get a credit on top of your mortgage.

You will often see adverts saying for example “Lån opptil 30 000 kr” which means “loan up to 30.000 NOK” and this will tell you the maximum credit you can get, but you will also have the option to ask for a lesser loan – you don’t have to loan the maximum of your capabilities.

In 2019 new rules have taken effect, which were implemented to counter a surge in personal debt and the implications of this:

• You can only have outstanding loans that total five times your gross yearly income. In this calculation all loans is conserders. Also student loans, mortgage, car loans etc.
• Maximum five years down payment on unsecured loans.

Credit cards in Norway are in a different category even if it’s calculated under the new rules. A credit card is a type of credit you can have everlasting and this is also one of the most popular forms of loan in Norway because of all the advantages you get. With a credit card you can get no interest the first 50 days, free insurance, discounts and cash back to mention some.

With regards to consumer loans and credit cards we see that the newer banks give you the very best interest, advantages and are thus also the most popular places to get this type of loan/credit from.