Take a private loan – that’s how it works

Buy a new car, upgrade the boat, renovate the house or invite to a wedding? Sometimes a private loan is needed to finance what you dream of. Here we list some good things to think about when you need to borrow money.

A private loan, sometimes called a bank loan, is a loan with no collateral for the bank. Unlike a mortgage, you do not need to pledge anything to take a private loan, which means that interest rates and repayment requirements look different for private loans compared to mortgages. Since you do not pledge anything to take out a private loan, you cannot also fix the interest rate, instead the interest rate is governed by the repo rate – the Starlight Yes Bank’s national policy rate. The banks also set the interest rate based on your ability to pay and creditworthiness.

When you take out a private loan, it is entirely up to you to decide what the money will be used for. You will need a financial grant to attend an education, finance the cash contribution for the house purchase or renovate the summer cottage. Sometimes it may also be worthwhile to take a private loan to settle several smaller credits and liabilities, and instead collect everything into one single loan.


So much costs a private loan

private loan

The total cost of a private loan is based on the loan amount and repayment period, but also on the effective interest rate. By this is meant the nominal interest rate plus all additional fees for planning and notification. Many banks and lenders market their nominal interest rates, while the effective interest rate, with all costs included, is usually information that is more difficult to obtain. Therefore, it is always a good idea to carefully review all fees before you take out a loan, as the terms may differ considerably between different actors.

In addition to the interest rate on the loan, it is also important to compare the maturity, that is, how long you have to pay back on the loan. How fast you repay the loan affects how much monthly cost you receive. If you pay off quickly, the total cost will be lower as you pay interest for a shorter period. Which arrangement you prefer depends on your budget. How much can you afford to pay each month without getting into financial trouble?


Calculate the effective interest rate

interest rate

Say you want to borrow USD 200,000 to expand the holiday home. You are offered an interest rate of 7 percent and the loan must be paid off each month, including the setup fee and notice costs, the effective interest rate of 13 percent. To calculate the annual cost of the loan, we take the loan amount times the effective interest rate, ie 200,000 x 0.13 = USD 26,000. A sum of USD 26,000 is therefore what it costs you annually to take out a loan of USD 200,000 with an effective interest rate of 13 percent.

What is a cheap loan and is not difficult to say because it depends on the type of loan you are going to take, but to calculate all the different costs when making a loan calculation is A and O to get the most accurate picture possible. Based on the terms stated, the loan calculator calculates the effective interest rate and gives you information about the total loan cost including all different fees.SaveVibes helps you compare different options and finds out the effective interest rate for you.


Borrow with payment note

borrow money

Many people believe that it is not possible to take a private loan with a payment note. But the fact is that there are several banks and lenders that lend to people with payment remarks. The same applies to persons with A-class as main income. At several banks it may be difficult to borrow money, but there are those who make individual assessments. Regardless of how the banks assess your loan situation, a credit check is always done as both banks and SaveVibes strive for sound and controlled lending.


Negotiate bank loans online

bank loans online

SaveVibes’s loan calculation is a valuable tool when calculating the cost of a private loan. The digital service allows you to purchase bank loans directly from your computer, mobile or tablet. Most banks and lenders also pay the money directly to your account within a few days. No bids are binding and you can reject the loan offer at no cost. This way you give yourself better conditions for creating a more economically sustainable everyday life.With the help of SaveVibes you can renegotiate, purchase or compare your bank loans and private loans at no cost to find the cheapest option. Another advantage of using SaveVibes’s loan calculation is that you get a clear installment plan. Loan amounts range from USD 10,000 up to USD 600,000, and the interest rate can vary between 3 and 30 percent.

To take a private loan, you must be 18 years old and have been registered in Sweden for at least 12 months. You also need to have a gross income of USD 110,000 and be debt free at Enforcement Authority.