The current Norwegian lending regulations in Norway, which have been implemented to get rid of debt in households, were amended on the 1st of January 2021. This new data is said to continue up until the end of December 2024, and the decision for reviewing this will be done in mid-2022, to see if any changes need to be made.
Responsible for this change is the Norwegian Ministry of Finance which set several criteria around the credit standards requirements for various financial institutions and banks. Included in these are the consumer credit and residential mortgage loans, which were initially altered back in 2015 and again in 2019.
These restrictions and amendments were aimed at reviving a few aspects, namely:
- The debt-to-income ratio for consumers
- Principle payments relating to consumer loans
- Mortgages with a high loan-to-value ratio
- The ability of debt serving towards consumers
- Property value and mortgage size relation i.e the LTV ratio or loan-to-value
There is also a ‘flexibility quota’ assigned to these institutions that entail customer-specific valuations. In other words, there is a space assigned to 10% lending value outside places such as Oslo, and 8% of this in Oslo. In other regions, it is set to 5% throughout.
Knowing this makes it easier to take out a loan in Norway, however, these are just the criteria for the banks and resources. The criteria for consumers also have their dos and don’ts. we take a look at this briefly below, so the next time you consider choosing to borrow money, you know exactly what to expect.
Before Taking Out a Loan in Norway
Using a lender or loan dealer: Not surprisingly, banks usually hone in on their clients to choose them for any funding requirements. This means you will probably be faced with a lot of options at some point. Going through all the various choices may take time and can make your head spin. Going to a lender is usually a better option if you know how to go about doing it. Lenders who deal with consumers have to abide by the criterion above.
As a citizen, you can claim a deduction for a few different things. Some of these include:
- Establishment costs to help eliminate a loan
- Expenses related to converting your loan to another currency
- Charges related to the prices of goods and services as per the current value
- Any loans and expenses related to housing cooperatives such as an individual compensation entitlement or joint debt
- A loan from an employer, relative, or circle of friends can be claimed
- Interest rates, accumulated debt, and credit score purchases in other countries aside from Norway.
However, you cannot claim a deduction for things such as:
- Due to pay interest which has changed from the time you acquired it. This can only be deducted once that tax period is over.
- Student loans from certain funding companies
- Charges concerning certain types of debt
- Any underpaid tax is not deducted
When completing your tax return for the current year in which you took out the loan, you must show the values including those that you have already repaid to the bank or lender.
When submitting your returns to the tax authorities, the decision or ‘test’ is based on a comparison against payments made and those that are due, and those that the lender has on record. If the two amounts are different you may need to go back to your lender, and re-assess it or complete a new tax form or annual assessment of your business and loans.
Any quantities that may have been deleted, added, or regulated must be proven through your declaration and from the organization that evaluates your credit score. In the case where you are acquiring a loan for your business, the numbers should always come directly from the enterprise.
Some forms will already be pre-completed by the tax authorities and you will need to complete the rest, making sure that all the information you provided from your side, is accurate. The consumer loans or Forbrukslån Test is carried out for this too and will be shown in a Tax and Pay Deducted
There are certain conditions, that you should keep in mind when applying for a loan of any kind. Some reputable establishments charge a minimal fee for interest accrued on your borrowed money. In cases where you do this via a creditor or financing corporation, you will need to make sure your year-end assessments are correct and include any official data relating to any borrowed monies from all related parties.
The option of acquiring a consumer loan is a very helpful one, especially in times when you are in dire need of financial assistance and cannot wait for a long time. These are one of the best for quick and easy funds, that get sent straight into your bank account within days.