Monthly Archives: February 2019

Consolidated loan’s death syndrome # 2 – Focus on the APR rather than the interest rate


When it comes to consolidated loans, there are a lot of good advice, tips and to-do lists that are good to know about. It can feel like a complicated process both taking a consolidated loan and then managing it.

However, there is one thing that is more important than all the other good advice – a deadly sin. When it comes to deciding on the consolidated loan, there are several factors you can look at.

It is about comparing the different solutions, which is possible when you have obtained several offers. But here you should focus on APR and not the interest rate.

Focus on interest rates rather than APR

OPEN stands for Annual Percentage Costs , and when you compare different consolidated loans, it is possible to see which ones are the cheapest. Always choose the consolidated loan with the lowest APR.

One of the elements of being mistakenly focused a little too much is the interest rate. But it is a really bad idea to look blindly at it and it is deadly sin no. 2: To focus on the interest rate rather than APR.

There may be special cases where fees and founding costs may result in a distorted picture of the cheapest consolidated loan. If you choose the lowest APR, these costs are included and you are sure to choose the cheapest solution.

APR is always the most important thing!

When it comes to consolidated loans, the APR is always the most important. The error of looking only at the interest rate when you compare is that you can come to the wrong conclusion. Whether it is expensive or cheap depends on a variety of expenses, including the formation costs, fees, interest rates, and all other small costs.

Some consolidated loans may have a low interest rate but in return have a very high fee for founding. In this way you can be “fooled” if you do not have a look at the AOP level

Example 1: Amounts of 5,000 to 15% in interest and with DKK 800 in formation costs.

Example 2: Amounts of 5,000 to 16% in interest and with DKK 100 in formation costs.

Here, the marked difference in exploration costs of DKK 700 can lead to example 2 being the cheapest, although it has the lowest interest rate. It will OPEN clarify whether or not the case is.

The interest rate is included in the APR, therefore you can sanctify yourself by keeping an eye on the annual costs. All consolidated loan providers online must inform about it, therefore it is easy for you as a borrower to compare the various offers with each other.

Consolidated loan – when you can not get it?



Consolidated loans are obtained for various purposes. Many people opt for consumer consolidated loans that allow them to allocate financial resources for any purpose. On the other hand, popular Consolidated loans also include mortgage Consolidated loans that allow you to provide financial resources that you can spend on the purchase of an apartment or house.


You can not always get a Consolidated loan. The basic credit problems can be attributed to bad credit history. A bad credit history is recorded as part of BIK and concerns cooperation with banks in terms of repaying financial liabilities.

The BIK contains information on various unpaid liabilities or late payments, including bank Consolidated loans. Particularly negatively perceived are those liabilities that have been repaid, but were collected or subjected to execution by the bailiff.

Then, such an entry usually does not allow obtaining a bank Consolidated loan. Of course, much also depends on how old is such an entry or what is the financial situation of the person applying for a Consolidated loan. In general, entries in the BIK are kept for several years, which applies to both positive and negative entries.

No credit history

Another problem that particularly affects new borrowers is the lack of credit history.

For banks, such a client also does not have much credibility. Of course, in the case of a very good financial situation, a lack of credit history may not be very negative. However, even those earning average financial resources may have a serious problem when borrowing. In this case, it is worth taking care to build a credit history.

A positive credit history can be built by deciding on short-term Consolidated loans, which are much easier to obtain even if there is no credit history. You can talk here especially about installment Consolidated loans. You can also decide on credit cards, where you can build a credit history by regularly paying off your credit card obligations.


Low creditworthiness is also a common problem when applying for Consolidated loans . Credit history affects creditworthiness. However, even in the case of a good credit history, low incomes can make it impossible to get a Consolidated loan.

However, it is important, among other things, for what period you want to borrow funds and how much you want to borrow. The bank may refuse to grant a Consolidated loan in a specified amount or for a specified period due to inadequate creditworthiness. In this case, you can always try to negotiate with a bank that can give less credit with a given credit rating.

You can also decide to secure the Consolidated loan through the lenders who will guarantee the Consolidated loan or by establishing a mortgage on the property. Yet another solution is to use the help of financial advisors, which allows you to ensure matching of Consolidated loan products in terms of the possibility of obtaining them.