Borrowing money is a fact of life. Whether it’s to buy your first home or a new car, launch or expand a business, or improve indebtedness and cash flow, most of us need a loan at some stage in our lives.
In this blog post, we aim to provide beginners with a guide on how to secure a personal or business loan with a focus on residents in Finland and France.
Key Takeaways:
- Loan terminology explained for your convenience
- Become familiar with the various types of personal loans available in Finland.
- Understand the business loan landscape in France.
- Learn how to obtain comparison loan offers free of charge and with no obligation.
- Familiarize yourself with how to secure fast business and personal loans.
Loan Terminology Explained
Let’s start by explaining some of the terms you’ll come across when researching loans, starting with ‘secured’ and ‘unsecured’.
The Difference Between Secured and Unsecured Loans
Broadly speaking there are two different types of loans – secured loans and unsecured loans. The first type requires you to offer collateral, whereas the second doesn’t. What is collateral? It is an asset you own that the company offering a loan requires you to pledge, and that can be forfeit should you default on loan repayments. The most common form of collateral is property. An unsecured loan is one that is offered without any form of collateral being required.
The type of loan you can obtain is usually defined by the size of the loan, your creditworthiness, and your ability to offer collateral.
Another important difference in terms of loan conditions is whether the interest is fixed or variable.
The Difference Between Fixed and Variable Interest Rate Loans
The difference between fixed and variable interest rate loans is obvious. The rate of interest the lender offers is, in one case, fixed for the duration of the loan, or it is subject to variation. You know where you stand in terms of repayments with a fixed interest rate contract, whereas you don’t when the rate is variable.
It is worth bearing in mind that a fixed rate of interest can be higher than variable interest, especially when the trend is for interest rates to fall. When the interest rate is fixed, the lender is shouldering the risk should base interest rates drop. It is possible that the total repayment amount can be less with variable-rate loans than their fixed-rate counterparts.
What ‘Term’ Means When Discussing Loans
The word ‘term’ in loan terminology refers to the duration over which loan repayments must be made. It should be noted that paying off a fixed-term loan early can invoke a financial penalty as the lender forgoes future interest payments. An early settlement charge is their way of recouping some of this loss.
It should also be understood that the longer the term, the more you will repay in total because the interest applies over a longer term.
APR and Representative (or Rep) APR
The initials ‘APR’ are short for ‘Annual Percentage Rate’. APR is the official rate quoted when applying for loans. It includes the cost of borrowing (i.e. the rate of interest) and any associated costs that are included, such as application or annual fees.
If you see the term ‘rep APR, ‘ tread carefully. It indicates that only 51% of successful loan applicants will get the interest rate shown in the loan advert. The remaining 49% of applicants might be offered a different rate.
Consumer Loans in Finland
The best way of finding consumer or personal loans in Finland is to make use of the country’s network of loan comparison sites. These are digital platforms that search for the best loan offers for those in urgent need. There are different types of loans available for different purposes, one of which is debt consolidation.
Debt Consolidation Loans in Finland
If you’re looking to improve your financial position by consolidating several loans or credit card debts with a view to making them easier to manage and reducing the total amount you repay, loan comparison platforms like Lainojen-Yhdistäminen.com are the perfect place to start.
They will seek out the best consolidation loans for up to €70,000 on your behalf from a number of reputable, trustworthy lenders. You’ll get up to 30 different loan offers to compare at your leisure. The process is fast and won’t cost you a single cent. Lainojen-Yhdistäminen makes their money through affiliation deals with the lenders.
Fast Personal Loans
If speed is of the essence, a Finnish loan comparison site like Laina Heti could be the answer. All you have to do is complete an online application form (which takes only minutes). Once you’ve completed the form, the platform will set the loan comparison process in motion. Within minutes, you’ll be presented with a number of alternative loan proposals from various sources from which you can choose the most suitable offer.
Unsecured loans can be finalised more quickly than secured loans as it takes a little time to process collateral. However, small unsecured loan amounts like €300, for example, can be transferred to your account immediately.
As long as you’re over the age of 18 and you have a regular, steady income and a reasonable credit history, you’ll secure a loan in no time.
Another fast personal loan comparison platform is Luotto.io. This digital loan tendering site also gives you the opportunity to compare up to 30 loan proposals from safe, trusted lenders totally free of charge. They’ll send you the offers direct to the email address you provided, and you can check out any details you want to buy get in touch with their professional loan advisors.
The loan offers you’ll receive will all offer fixed monthly repayments, so you know exactly where you stand financially. You can use Luotto’s on-platform loan calculator to establish the best amount and timeframe that aligns with your financial position.
Business Loans in France
Whether you are applying for a business loan in France for the first time or you are refinancing, a French business loan comparison platform like Prêt Professionnel is a good place to start. It’s not a lender; it’s a platform specially designed to provide accurate, trustworthy information on business loan availability in France.
It used to be the case that the best source for business loans was traditional banks. But in recent years, they have become more reluctant because they must now maintain larger capital reserves in order to protect themselves from financial risks, and following the 2007 financial crisis, more stringent guidelines and rules have been put in place in terms of risk limitations. However, new lending platforms, referred to as alternative digital lenders, have emerged to fill the void created by the lack of bank financing available to businesses.
Using a set of advanced algorithms. Prêt Professionnel will research loan offers from hundreds of different lenders and will summarise those that best meet your requirements. The process takes less than 24 hours.
Types of Business Loans Available in France
Using the Prêt Professionnel platform, you can obtain comparison loan offers for amounts from €2,000 to €1 million. You’ll find a useful tool on the platform that facilitates getting immediate estimates of the cost of loans for various loan amounts (montants des prêts) across various loan terms (durée du prêt). Simply position the sliders to the amounts and durations you’re interested in.
The types of business loan comparisons you can request include:
- Secured loans requiring some form of collateral, such as real estate or equipment.
- Unsecured loans that don’t require collateral, but where interest rates could be higher.
- Cash loans for one-off needs.
- Lease loans that allow you to finance goods or vehicles with an option to purchase.
The business loans that are available in France are not only for startups. Financing solutions are available for supporting growth through each stage of an SME’s development and expansion.
Conclusion
The new digital loan market is gaining momentum not just in Finland and France but in countries worldwide. The slowness of both the application and decision-making processes operated by the national, traditional banking networks are seen by today’s citizens, entrepreneurs and business owners to be coming up short .
Whereas once upon a time, it took weeks to obtain loan agreements. They can now be secured in minutes. Some agreements might take a little longer when secured business loans are concerned, but even in this area, the approval process can be measured in hours and maybe days rather than weeks.
Another improvement that the alternative digital loan sector offers is the wider acceptance of loan applications. By using state-of-the-art technologies that include things like advanced analytics and algorithms, to the Cloud, social media, and Big Data, the new breed of digital platforms has instant access to the data they need. The acceptance criteria have changed, and thanks to cutting-edge methodologies, you are more likely to receive competitive loan offers for your consideration than ever before.
