Strong increase in consumer loans

Consumer loans Money finance InvestmentConsumer loans. Photo.

Strong increase in applications for consumer loans

More than 3.5 million applications for consumer loans were made in Norway last year, almost 700,000 more than the year before, according to figures from the Norwegian FSA (Finanstilsynet).


– Many want to spend money they do not possess, says information director in Finance Norway, Tom Staavi, to NRK.

– It must mean that there are many out there who want to spend more money than they possess, and thus want to use the ability to lend unsecured funds, says Staavi.

Consumer loans are usually very expensive, with an interest rate that is often 20 per cent or more. People should think twice before buying goods and services on credit, Staavi believes. He argues that private economics should be a focus subject in school.

– In Finance Norway we have always, and continue to, warn against taking up this type of loan that you do not know if you are able to repay quite fast, says Staavi.

Aggressive marketing

He does not however imply that the financial institutions “throw money after people”. Seven out of ten applications for consumer loans and credit cards were declined last year. 1.2 million loans without collateral were still approved.

The Consumer Council points to aggressive marketing from banks as an explanation of the sharp increase in the number of loan applications.

– I am both surprised and worried. The newest banks in Norway are centered on consumer loans, and these must achieve market shares by active promotion of their products, says Head of Department, Jorge Jensen.


© NTB Scanpix / #Norway Today