Søk Refinansiering Uten Sikkerhet (Apply Refinancing Without Security) – All The How’s & Why’s
If you’re familiar with how the world of loans works, you’d know how lenders and finance companies tend to be very tedious when it comes to making loan assessments. You can’t just borrow money just because you want to or need to. There are certain requirements that need to be met and certain conditions that must be followed in order for you to be qualified for a loan. The same goes with refinance loans – or should I say, especially with refinance loans.
Refinancing doesn’t always put the creditor in the best light. After all, most loan consumers ask for refinancing when they find it hard to manage existing debt (read more). Again, most but not all, use refinancing as a way to carry over existing debt to a new loan, usually to defer higher interest rates or avoid late payment fees.
Although such is the purpose of refinancing loans, you should still expect companies to be more vigilant when it comes to assessing these types of applications as an application for refinancing might indicate negative credit behavior.
Now, you might wonder if availing a refinancing loan without collateral is even possible given how banks and other financial institutions strictly assess such applications. You can’t help but think “If they’re so careful about refinancing applications, why would they ever approve loans without any collateral for security?” Well, we’re here to tell you that it’s more than possible to acquire a collateral-free loan in Norway and today, we’ll discuss how you can qualify for one.
But first, let’s address the elephant in the room: Why refinance in the first place?
When Should Refinancing Be An Option?
There are a number of reasons why people, loan consumers specifically, would opt for a refinancing. Some do it for equity liquidation in the case of refinancing mortgage loans, but most do it for a more practical, and oftentimes desperate, reason: to buy more time to pay off debt without succumbing to hefty fees and penalties.
Refinancing is essentially a type of loan that covers other loans. For instance, if you have several unpaid credit card debts from multiple companies, applying for a refinance to consolidate all your debt into one place, extend the payback period, and possibly reduce the monthly payments while you’re at it is one of the best choices you can make financially. Not just with credit card debt, you can apply to refinance any type of existing debt, especially those with steep interests.
Sometimes, the road to becoming debt-free starts with acceptance. It’s accepting the fact that you cannot manage your existing loans on your own and that big financial breakthrough that you’re waiting for is not bound to happen anytime soon. So instead of crossing your fingers and wishing for the best or hoping that everything will get better if you just hang tight, looking for a more practical alternative that will bring you closer to your goal of paying off your debt is a more viable option.
Yes, you’ll resolve debt by taking on new debt and we understand why it might seem counterproductive at first glance. However, if you play your cards right, it might as well be the best financial decision you’ll make in your adult life.
Here’s why:
Avoid High Interests & Penalties
If most of your outstanding debt is subject to high interest rates (i.e. credit card debt, personal loans, short-term loans, etc.), then refinancing might be a viable option for you – especially if you’re not really expecting any big changes in your income anytime soon.
A lot of us “hold out” and pay off the minimum amount due on our loans in hopes that things might change for the better soon. However, if your annual interest (APR) on a loan is high, the minimum payments you make will hardly make a dent on the principal amount of the loan. You will only be paying off the interests that add-on every month.
Instead of making minimum payments and letting your hard-earned money go to waste, look for a company that can offer to refinance your outstanding debt and carry it over to a new loan. This can help you land a better deal on effective interest rates as most refinancing companies offer more competitive loan terms to encourage loan consumers to refinance.
By refinancing you can also reduce the amount you pay in installments monthly, making the repayment process more manageable and attainable. This helps you avoid any late payment fees and penalties as a result of not being able to pay your loan back in time.
Reduce Your Immediate Financial Burdens
If your head is occupied thinking about all the due dates you have to meet, refinancing can help you offload all that mental stress by consolidating all those different due dates into one. As mentioned previously, the goal of a refinance is to settle all your outstanding debts with a new loan. This means bidding goodbye to all those varying due dates that you dread throughout the month. When you refinance a loan, all you need to worry about is the due date of the new loan and nothing else.
Pay Back The Loan At A More Realistic/Manageable Pace
When you opt to refinance, you also give yourself the benefit of time. Refinancing pretty much means taking on a new loan in place of your outstanding debts. This also means that your loan contract is renewed, with different (and better) repayment terms and no history of late payments yet. You basically bury the hatchet by leaving your old loans behind and starting over.
Also, because the loan is renewed, there is no rush to pay everything back all at once. No high interest rates are chasing after you. All you have to do is religiously pay the monthly installment on the due date you’ve agreed upon with your loan provider. This way, you’re able to pay back the loan at a more realistic pace and manageable timeframe.
Are You Qualified To Apply For A Refinance Loan Sans Collateral?
Yes, now that you are more familiar with all the perks of refinancing, we can only imagine that you’re raring to go hand in your application. Before you get ahead of yourself and start filling out forms, here are a few things that you need to consider to ensure that you meet the basic requirements most refinancing firms look for in order to qualify someone for a loan uten sikkerhet (loan with security).
- You Have Good Credit History
First things first, take a look at your most recent credit report. If you don’t have it, you can request for one from your bank. In Norway, a credit score of 71-100 is the most ideal. This makes you a low risk client for most banks and financial institutions as this tells them that you are someone who is financially conscientious and responsible when it comes to managing debt.
Now, you may be thinking “If I’m applying for refinancing because I can’t manage to pay what I owe to the bank already, then I sure as hell won’t have a decent credit score.” Well, that isn’t always the case. Just because you owe the bank doesn’t mean your credit score has tanked. In many cases, creditors are able to preserve their credit score by simply making sure they don’t miss any payments — even if they’re minimum payments.
As long as you make sure that you made your minimum payments in a timely manner, most of the time, your credit score should be a safe number.
- You Have No History Of Loan Defaults Or Avoidance
To add to the previous point, your credit history should be clean — especially where it concerns default or delinquent payments. You should have no history of trying to avoid or evade debt, much less defaulting on one. This can automatically lead to an application rejection as this is a big red flag for loan assessors.
- You Have A Stable Source of Income
Lastly, you need to have regular, full-time work or a lucrative business, or both. Your source of income or revenue streams will allow banking institutions to forecast the reliability of your payments later on. Your income should not exceed your typical monthly expenses, loans and other debts considered.