If you have ever been in a tight spot and needed funds urgently to get out of it, then you will appreciate the concept of same day loan. Some banks and financial institutions will make credit facilities available but the stress and time spent in getting it sometimes makes it not worth the while. That is why consumers appreciate banks or lenders that will make funds available as fast as possible.
There are different types of consumer loans available and each of them has their processes and also terms and condition. Our focus in this article is on the loans that can be gotten on the same day. Stay with us as we discuss this in full details…
How Does Loan On the Day Work?
These types of loans are usually processed and disbursed in the space of 24 hours. All you need to do as a customer is to fill a form online. The bank will then obtain all the information they need about you automatically. The information needed include your credit score, your tax information, your payment history and other necessary details about your finances.
The process of application for loan on the day is fast because it is assessed digitally by AI. Due to the interconnectedness of every site that has information on the applicant; the chance of approving a loan for someone who isn’t creditworthy is quite low. The digitalization of the process makes it possible for the lender to do their credit assessment and all the necessary checks in one day.
There are about 300 banks in Norway that offer this financial product. Some of them offer small amounts between NOK 20,000 and NOK 30,000 while a good number go as high as a NOK500, 000.
Except for a few lenders, all those who offer this product can have the loans approved and paid out, or utbetalt in Norwegian, on the same day. If it is a personal loan that will be used for consumption, the repayment period can be up to 5 years.
Although you choose the duration of the loan by yourself, this choice can be limited if the sum borrowed is low. Let’s say for example that you borrow NOK 5,000, your repayment period will definitely not be up to 5 years.
How to Get the Best Loan on the Day
Consumer loans may have basic guiding principles that are obtainable across board but there are still factors that will affect individuals differently. That is why you need to do some due diligence to find out what works best for you in your circumstance. So below are some tips to help you get the best option for you:-
Use an Agent
Some of us are not financially savvy and so may find it difficult to do all the research and make findings on offers that will suit us best. Others may be able to do all the paperwork and research involved but don’t have the time. This is where loan agents come in handy.
Loan agents are professionals who have a network of banks and financial institutions that they work with. These professionals help their customers to get loans without collateral with no stress at all. They also look out for the best offers under the circumstance and help their customers get it. This is because they have affiliations with as many as 20 banks/lenders and can easily get offers from them.
The advantages of working with a reputable agent include the following:-
- Saves times
- Gives you a wide range of options for comparison
- You get financial advice and assistance
- You don’t pay a fee for applying for any loan
- Loan offers are not binding on you – you have as long as 30 days to consider an offer but after that you have to re-apply and be re-assessed.
Compare Interest Rates
It is important to compare interest rates on different offers; this is because the interest rates from different banks vary significantly. Below are examples of what to expect:-
- For Banks that give microloans as high as NOK 30,000, their effective interest per year is usually about 60% or higher. These interest rates apply to everyone.
- Banks that give higher sums for loan on the day usually have an effective interest of between 8% and 18%. However, the interest rate that the borrower pays depends on how much the individual borrows and their credit score. Applicants that borrow larger sums and have high credit scores get lower interest rates while those with low credit score asking for small loans, get higher interest rates.
- It is generally costlier to borrow from lenders that only give micro and small loans. Banks that give large sums for consumer loans usually have a minimum amount pegged at NOK5,000 to NOK 10,000. So you might as well go for those ones so that the overall cost of the credit you get will not be too high.
Applying for Loan on the Day
Applying for this financial product is quite easy; all you need to do is fill out the form online. The information that you will be required to fill in are as follows:-
- Your social security number
- Your email address
- Your account number
- Your telephone number
- Loan amount
- Repayment period desired
This application is usually the same with what you will get whether with an agent or directly from the bank. Most lenders will usually ask for the purpose of the loan although this is not binding on the borrower (you can use the funds for whatever you want). This is just a formality for documentation to show that the credit wasn’t taken for any illegal venture.
Factors that Can Affect Your Application
Some people apply for loans and they do not get approved or the process takes longer than they envisaged. There are a number of factors that can cause that and we will tell you likely reasons and give you tips for faster approval and disbursement:-
Amount Requested for
The amount you request for can affect the processing of your application. You stand a better chance of getting approval and having the funds disbursed faster if you apply for a small or micro loan.
A good number of banks can reject or approve an application in minutes if the sum requested is lower than NOK 50,000. This is because the process of approval is automated and doesn’t need the physical input of any employee of the financial institution you applied to.
But in the case of an application for the sum of NOK500,000 from the same lender, the bank will need your account officer or one of the managers to carry out some checks, review the request before approval or rejection.
This process might take some time; although in some cases it can also be fast if the process is started and completed during work hours. This brings us to the next point…
Time/Day of Application
The day and time your application is sent in greatly affects whether you will get approved fast or not. So it is usually advised that you send in your application early on a work day and most often before Friday.
Although most banks will tell you as a standard response that the whole process from start to finish can be between a day and 3 days, the process can actually be faster. Like we mentioned, the time you sent in the application matters; so also does the day. Applications sent in between Monday to Wednesday may get faster response than those sent in between Thursday and Friday.
By response here we do not mean just an acknowledgment of your application but the completion of the whole process. So almost all banks will acknowledge your application before the end of business day but most will acknowledge within 2 to 4 hours while a few will acknowledge in minutes.
So you need to check how fast your approved funds will be disbursed before you apply to any lender.
Before you start your application process, find out all the documents required by the lender. This will help you get them all ready and present them upon request. Failure to have all the required documents ready can also slow the process. The faster you present the required documents, the faster the process can be.
Although banks carry out credit checks automatically, application for large sums of money will require some documents. Furthermore, some banks want to be sure that what they see online tallies with what is in reality; an example of this is your income. The documents they will most likely ask for includes the following:-
- Copy of payslips most often for the last 3 months.
- Tax return
- Statement of account for business or its approved account for the past 3 years.
Requirements for Getting Approval
There are basic criteria to qualify for approval for loan on the day and they are as follows:-
- Some banks accept 18 years as the legal age where one can apply for this credit while other insist on 20 or 23 years.
- Amount requested must not exceed 5 times the yearly income of the borrower. Some banks require a minimum income of NOK 120,000 but this also depends on the amount you wish to borrow; that is why the condition of the debt not exceeding 5 times the yearly income is more prevalent.
- The prospective borrower must be a Norwegian or have a Norwegian D number, foreigners are required to have lived in Norway for 3 years and also have proof that they have paid tax consistently in those 3 years.
Consumer loan on the day has been saving lives since the day lenders started offering it. Like we mentioned at the beginning of this article, this financial product can either be a blessing or a curse. It all depends on the consumer and how they engage the product.
We have taken out time and space to share some info on this subject and we believe that these basics that we have shared will help you make informed decisions.