With the countless opportunities to borrow money online , it may be difficult to figure out which loan solution is best suited to your needs.
Here it is important to remember that a loan today is no longer just a loan.
There can be a world of difference when it comes to requirements for you as a borrower, loan amount, maturity and, not least, the costs associated with the individual loan types.
Consumer loans and online overdraft facilities are two very popular loan solutions – but they both have their advantages and disadvantages.
We look more closely at these below.
What is consumer credit?
Are you missing out on money to cover a particular expense, or do you need to finance the purchase of a new TV, dishwasher or maybe a trip?
Then an online consumer loan can be the obvious solution for you.
Today, it is possible to find providers on the web that offer consumer loans of all sizes – you can even borrow up to 500,000 kroner with certain providers if your finances are in order.
With an online consumer loan, the total loan amount goes directly into your account without having to lift a finger.
In addition, you usually do not provide security for the online consumer loan or document pay and the like in order to be approved.
It basically means that as soon as your loan application is processed and approved, you just have to wait for the money to tick in.
Then you can use the amount as it suits you.
The individual loan providers offer you different maturities. But usually, a consumer loan must be repaid within 1 – 12 years, depending on the loan amount.
Often, you can completely choose the maturity that best suits your finances.
Therefore, carefully consider how large monthly repayments your budget can hold before you decide on the loan amount and maturity.
What is overdraft facility?
In recent years, online overdrafts with high flexibility have become extremely popular among Danish borrowers – and there are many good reasons for this.
An overdraft is one of the most versatile loan solutions and is especially suitable for those who need an available amount on the account.
If you are granted a cash credit, you get a certain amount available that you can use freely – for example, an available amount of 15,000 kroner.
Normally you get a login to the loan provider’s website, where you can pay money directly to your bank account, as it suits you.
There is no requirement for you to use the entire amount of the loan granted – and here is a clear advantage that you only pay interest on the amounts you spend.
Most often, there are no actual requirements as to when the overdraft must be repaid.
However, this is a freedom that you will also pay for in the form of a high monthly interest rate.
Therefore, it is not abnormal that the cost of an overdraft is usually somewhat higher than with a consumer loan.
Which loan solution should you choose?
In the end, it is only you who can assess which solution is best for you.
This depends on the extent of your financial situation and your borrowing requirement.
That being said, it is also important to remember that the providers of the two loan types can make very different demands on you.
It is therefore important that you familiarize yourself with the various terms before you decide whether you want to take out a credit or consumption loan.
To give you a complete overview of all the differences and similarities of the two loan products, you can take a look at our visual guide below. Here we have made it easy for you to compare consumer loans and overdrafts.
What is the cheapest – consumer credit or overdraft?
It also depends on the individual loan providers and not least your credit rating .
Keep in mind that the better credit rating you have, the more likely you are to get a cheaper loan offer.
Either way, overall costs should always be an important factor when deciding whether to borrow.
If you do not waste time exploring the market, you can quickly end up with a loan that is much more expensive than most necessary – and it is a pity to lose.
Whether you want to borrow a consumer loan or a credit card , we recommend that you create a free user.
By filling out a short form about your situation, all the work is done for you in minutes.
Next, you will be presented with a comprehensive list of all providers of both overdraft and consumer loans.
All you have to do next is to submit a loan application to your preferred provider.
If you start searching for the most advantageous loan now, there are good chances that you can get a loan agreement in house before the day is over !