Loan on the minute is a financial product designed for consumers to be able to take out small loans. The amount ranges from NOK 1,000 to NOK 500,000. You can apply on your mobile phone or through the website of the lender.
Although it is called loan on the minute, it does not mean that you will get the loan in 60 seconds. What this means is that the process of applying and getting approved for this credit facility takes just minutes. This is due to the fact that the process is automated and the borrowers’ details are verified electronically.
This loan is an unsecured one and therefore the interest rate is high compared to other loans that are secured. Note that a secured loan is one that is backed by collateral which is an asset that is equal in value to the amount borrowed (to be borrowed). An unsecured loan on the other hand is not backed by collateral.
Basic Requirements for Loan on the Minute
Every type of consumer loan has basic requirements and below are the basic requirements for this credit facility: –
- Age – You must be up to 18 years. Some bankers even prefer that their customers be 21 years or older.
- Fixed And Verifiable Income- Every borrower is expected to have a verifiable source of income and that income must be fixed. Applicants whose income fluctuates do not stand a strong chance of getting consumer loans with good rates.
- Residence Status – In Norway, you have to present proof that you have lived in the country for at least one year. Some bankers even prefer residents who have lived up to 3 years in the country.
- Must Not Have Any Payment Notice – This means that you do not have any outstanding debts.
How Does This Loan Work?
What most banks advertise as lån på minuttet (loans by the minute) is actually Same Day Loan. While it is true that there are lenders that actually approve loans and disburse the funds within minutes, they are no longer considered legal in Norway.
However, SOME lenders can and will process your application within minutes and give you an answer. This is because the process of checking your credit history is carried out automatically. When the credit check is done, an authorized official has to approve it manually. This is the reason it will take a little longer for the funds to be disbursed.
So, if you want to go the legal way and do the right thing, you should expect that your approved funds will get between 1 to 3 days. Note that the duration of the money hitting your account depends on the lender. But bear in mind that getting a loan disbursed immediately after you apply is no longer legal in Norway.
The process for getting these Same Day Loans is as simple as follows: –
- Search for lenders that offer this product or approach your bank if they do, and you decide to go with their service.
- Fill in the application – most of these lenders usually operate online so the application process is easy because you don’t have to visit any physical office to fill out the form.
- Upload whatever documents are required.
- Awaiting approval.
- Sign the loan agreement with your BankID.
What to do before Applying for Loan on the Minute
A lot of people always take out this loan in a hurry but that is not a wise course of action. No matter how urgent the emergency is, you should take out a few minutes to do some research so that you would not get into trouble at the end of the day.
Below are some of the things that you have to do before you apply for the loan: –
Ensure that You Can Repay /Rearrange Your Priorities
Crunch the numbers to ensure that the amount you plan to apply for is exactly what you need. Do not be tempted to accept an offer that is higher than the amount you really need. Remember that loans come with fees and these fees are deducted before the money is disbursed to you. Factor that in so that you can determine the amount that you will be left with.
The next aspect of this point is that you need to know whether you can comfortably repay the loan. You can do this by calculating what your monthly payment will be. There are loan calculators online that can help you have an idea of what these monthly payments will be.
While it is true that lenders will look at your income to ascertain whether you can repay or not, you need to do the same for yourself. A lender is looking from the outside but you are the one who wears the shoes; you know where it pinches.
Any loan that will cause anxiety and undue hardship for you at every monthly repayment is not worth it. Some ‘urgent’ needs are not really as important as they appear. You may have to rearrange your budget and priorities in some cases to save yourself from entering into unnecessary debt.
Check Your Financial Standing
By this, we mean that you should look through your credit history to be sure that there is nothing that will disqualify you from getting approved. Also, check your credit score as this will help you know for which deals you qualify.
A good credit score is between 650 and 700 and this will get you favorable terms and conditions. If you now have a credit score that’s over 700 you stand a good chance of getting competitive offers that you can choose from.
You can get your credit report for free from some online platforms or you can buy the report. When you get your report, check for errors and be sure that it is accurate, if you discover any error(s) contest it and ensure that it is corrected.
In the event that your credit score is low, you may decide to put off the application to improve your score. On the other hand, you can go ahead and look for lenders that will approve loans for people within your score range. Bear in mind, however, that you will be at their mercy as far as interest rates, terms, and conditions are concerned.
Explore All the Options
This is especially useful for people with low credit scores, or payment notices in their reports. There are some options you can explore if you do not want to be at the mercy of the lender. These options include applying with a co-signer and going for a secured loan.
A co-signer will help boost your credit score as your credit score and theirs would be counted as one score. So, a combination of a poor credit score and a high one can be rated as a good credit score. This will now give you the leverage to negotiate better terms and conditions and a lower interest rate.
A secured loan is one in which you put down an asset as collateral. This automatically reduces your risk factor as the lender has an asset that they can hold onto to recover whatever money they lend you.
Ensure You Compare Offers
It is important that you research as many lenders as possible so that you can make the best choice for you. Bear in mind as you make your comparison that your parameters must be the same. Since we are talking about loan of the minute in this article, you cannot use the parameters of a mortgage loan to compare this type of loan.
So, take a little time to search for available lenders and see what each of them has to offer.
Much as we know that loans on the minute come with higher interest rates and shorter repayment duration, we cannot deny the fact that they have proven to be lifesavers for people. Be that as it may, we have shared basic information in this article to help you get the best out of this financial product.
You will do well to bear these tips in mind so that you will not dig yourself deeper into debt with this product but rather you will enjoy its full benefits.