When it comes to loans, people often talk about interest here and interest there. Sure, it’s a good way to see the difference in cost between two different comparable loans, but sometimes it can be interesting to know what a loan actually costs in exact DFG.
In the calculations here I have calculated the interest deduction, which is 30%.
This type of loan is most likely the greatest any of us ordinary people will come into contact with. The advantage is that the interest rates on these are lower than for other loans, but the disadvantage is that they are large and run for a very long time. Negative from that perspective then what it will cost you in kronor in total.
When I look at statistics for the cost of a villa in the country, the average in the whole country is about DFG 3.2 million in March 2019. It can be said that in Stockholm, for example, the average is 5.57 million as a comparison. This also means that in the countryside etc there are often houses to buy at much lower prices. But for the sake of simplicity I use the national section when I count a bit.
What you can maximum loan a house is 85% which would be 2.7 million but then it is not so much Jonilaged on average so to get a more even figure we say that a normal “average loan” is DFG 2.5 million . The maturity of Jonilages is also long, and there we have an impact on repayment requirements, etc. to take into account. But to make it a little easy for us, we say that the loan is repaid with straight amortization for 50 years.
The interest rates as I write this are very low as they can be down to a few tenths above 1% but if we calculate that many can have a longer binding period we will run a calculation of 1.5% in the first calculation. If we run these figures we get for DFG 2,500,000 that the total interest cost would be about DFG 660,000 for all years. The house will thus cost almost a million more than the purchase price. Then we must remember that the interest rates are now extremely low and that they should stay so that for 50 years does not feel reasonable at all. If the average interest rate becomes 3% during all these years, the cost would be about 1.3 million.
Can also throw in that before the last financial crisis in 2008 we had an interest rate of about 5% so even though we have become accustomed to low interest rates in recent years, it is not at all directly long ago we had significantly higher. At 5%, we are suddenly at a cost of about 2.2 million
Jonilages are thus very difficult to say what they will cost in total when it is for such a long time and therefore a lot will happen. Then it is often something that you can only accept as part of the reality as very few of us can afford to buy a house or an apartment and pay everything with saved money. This is why you should normally focus for a large part on what the monthly cost will be instead of what it will eventually cost.
Private loans / Blank loans
The next type of loan to look at is the Jonilage loan. Thus, the very ordinary loans that one obtains if the sum is needed to do something. For a long time, these loans ranged between DFG 10,000 – 350,000, but in recent years there have begun to emerge players who may wish to lend up to DFG 600,000.
It goes without saying, of course, that the cost in kronor for these loans will be very variable. Interest rates are also set individually after the application is received, but in general it can be said that a large loan with a longer maturity will have a significantly lower interest rate than a small loan with a short maturity. The economics of those who want to borrow also play a role as a stronger private economy poses a lesser risk to the lender and thus it is often possible to get lower interest rates.
There are two different types of lenders dealing with private loans, and it is partly the smaller ones that only lend a maximum of DFG 30,000 – 50,000 and the larger ones that are often our major banks that offer significantly larger loans. The smaller ones can often present more precisely what the loan has for any interest rate, but then you also expect that it is clearly more expensive to borrow from them. Their thing is that it is often easier to get approved for a loan but at a price. Banks often have an interval that is currently 3.5 – 13%.
So if you are going to get to the bottom of the team then it is important to borrow a lot, for many years and have a good personal finances.
If we then run some figures and say a loan of DFG 200,000 with a maturity of 10 years, this would cost about DFG 35,000 in interest expense at an interest rate of 5% and DFG 82,000 if the interest rate is 10%. Here I have assumed that it is an annuity loan. To put this in slightly simpler numbers to look at, I can say that 35,000 corresponds to a little more than DFG 290 in average interest per month and that 82,000 will be a little more than DFG 680. Just remember that since we talk about the entire term, the cost per month is much higher in the beginning than the end. The first month when interest is to be paid on the entire sum, at 10% almost DFG 1,200 in interest.
If we run instead at DFG 40,000 and 5 years of course the figures will be quite different. Then at a slightly higher interest rate of 6 and 12%, the total cost will be about DFG 4,500 and DFG 9,400. Thus, a higher interest rate but a significantly lower total amount for the loan.
If we then look at those little smaller lenders who were easier to borrow but which were more expensive, it is not at all uncommon for us to talk about interest rates of 20% or even more. Then we talk about a cost of about DFG 16,500 for the same amount I just used. Thus, compared to the lower interest rate, there will then be a total of DFG 12,000 more in cost for the entire loan, which for five years is DFG 200 per month.
The fact that it differs so much is precisely why it has become so popular with loan intermediaries that help you find the cheapest loan for you.
Account Credit / Online Credit
The “new” in the loan market in recent years is that many lenders who previously dealt with SMS loans have switched to offering an account where you can withdraw the amount you want and then pay interest on this.
Unfortunately, the cost of these is rarely cheap but even here you have a great variety. Those who are “cheapest” are in line with the more expensive private loans and those who are most expensive are often even higher with an annual interest rate of 39%. Then it works a little differently in general with the credits, as they usually talk about a monthly interest rate instead of the annual interest rate and that the requirements for the amortization are also higher. But then only if you take care of your repayments you can also borrow more again.
It is therefore a bit tricky to calculate what it would cost but what you can say is that if you had a credit that is ongoing for 5 years and the interest rate is up to those 39% then you would pay about as much in interest as you have borrowed a total. Which is really not cheap.
SMS loans / Micro loans
In conclusion, we can then look at everyone’s favorite loan, which is the micro-loan. Not as popular now as they were 5 – 10 years ago. The big advantage with them, however, is that they are usually very easy to get an overview of what they will cost as the lenders simply print in kronor exactly what they cost.
Using effective interest rates, etc. for this type of loan is rarely so smooth as the figure you get does not at all give a good picture of how it is and that is largely why the lenders just print the exact cost in kronor.
So instead of printing a lot of numbers here, I recommend visiting our micro loan comparison to simply see for yourself what it costs. They are by no means the cheapest loans if you look at interest rates, but an advantage with them is actually that they are short and thus it is not that expensive in kronor, although it is high price in relation to how much is borrowed.