When you take out a loan from a bank or other lending institution, they expect you to repay the money after a certain amount of time. To make money on their borrowed money, lenders have more or less a price on the loan, and you can see how much you can borrow and at what interest rate when you make your loan application.

It costs money to borrow money

It costs money to borrow money

The interest rates that banks and lending institutions take for their loans vary over time and are based on the customer’s finances and conditions.

You as a customer have no control over you, such as the economy. But most people can do something about it and thus lower your interest rate. Which can save you many thousands of dollars each year?

Effective and nominal interest rate

Different types of loans

Before you start comparing loans and lenders, you need to learn about two terms that you will encounter almost everywhere; nominal and effective interest rates. In short, the nominal interest rate is the interest rate that the lender takes for the loan, while the effective interest rate is the one you really pay, measured over a year.

What makes the effective interest rate higher than the nominal rate is the fees that the lender charges for the loan. Let’s say you take out a loan of 100,000 for five years at an interest rate of 5%. The various fees go for a total of SEK 325. This means that the effective interest rate will be 5.85%.

The difference between the nominal and the effective interest rate may be minimal, like the example, but it can be much more clear for smaller loans. Especially when calculating the effective interest rate on fast loans it can look very high, but it is important to realize that the effective interest rate is measured over an entire year and fast loans often only last for a couple of months.

Which means that the picture can be quite skewed. The best way to figure out what the interest rate really means is to look at the monthly costs and figure out how much you will pay in the end.

Different types of loans

Mortgage is the type of loan where you can get the lowest interest rate. This of course when they are loans with collateral, that is, the home. This makes them much more secure for the bank, which allows them to offer their customers loans with much lower interest rates than the bank can offer unsecured loans.

The problem with loans with loans with collateral is that if you are unable to pay your loans, the bank can take your collateral and sell it and use the money to pay off your debts. You can therefore say that the bank “owns” a part of your home as long as the mortgage is still there. The size of mortgages means that many have retained their mortgages for many years.

With a private loan, also known as a bank loan, you can borrow up to SEK 600,000 without collateral at a favorable interest rate. You can use such a loan for whatever you want, such as collecting loans, buying a used car or paying for a renovation of the kitchen or bathroom in your home.

The interest rate is set individually within certain limits and the lender is based on information about your financial situation, both historically and today and in the future, when the interest rate is set.

The basic rule is simple – the better economy you have, the more chance you have of getting low interest rates on your private loan.

Frequently asked questions & answers about borrowing at low interest rates

Frequently asked questions & answers about borrowing at low interest rates

Can I borrow at low interest rates? The interest rate you receive depends on your financial situation. To improve your chances of getting the lowest possible interest rate, we recommend that you compare the lenders before applying for a loan.

How do I get the best interest rate ?? To get the best interest rate, you need to compare lenders. You can use a loan broker to get multiple offers with a single application or compare before applying.

Can I get a low interest rate loan with payment notes? Yes, more and more lenders are offering loans despite payment remarks. Many of these look at your current financial situation instead of your history.

How do I get a low interest rate?


The size of the loan clearly has a major impact on how much interest the loan will have. For larger loans, lenders are not as sure that you will be able to repay your loan. This is especially characteristic of unsecured loans where your finances are the only collateral the banks have.


The maturity of the loan, ie the repayment period, does not have as much impact on the interest rate as the size. But a longer maturity of the loan still ultimately means a more expensive loan. The longer you have the loan, the longer you have to pay interest. Which will probably be as expensive as a higher interest rate.

Variable or fixed interest rates

Variable or fixed interest rates

A constant question in almost all households is the question of fixed or variable interest rates. Which is best and which should I take to get the lowest interest rate? The answer to that question is: it depends. Fixed interest rates mean that you negotiate a fixed interest rate that is valid over a period of 1 to 5 years.

Whatever the policy rate may be, you always pay the same interest. Fixed interest rates are therefore good to have when interest rates will rise. If you have a fixed interest rate of 5% and the interest rate rises to 7%, you save the 2% that you would otherwise have to pay. However, it is difficult to know how the interest rate will behave. You want to fix the interest rate before it rises and not after.

If you have a variable interest rate, you can, on the other hand, have a much lower interest rate than if you had fixed it. But you have the risk of getting a lot higher too. Thus, variable interest rates have higher profits and higher risk than the fixed rate.

For a long time, it has been very advantageous to have a variable interest rate since the policy rate has been so low. But you never know when it can postpone.

If you choose to have a variable interest rate, it can be good to have a reasonable view of the economic news and the experts’ forecasts.

Interest rate cap

Do you want a variable interest rate, but you are still unsure that the interest rate will rise? Then there is a unique alternative for you. Several banks and lenders offer their customers an interest rate cap.

Interest rate ceilings are a way for you to combine the benefits of both types of mortgage loan arrangement. With an interest rate cap, you get the benefits of a floating interest rate while getting the security from a fixed interest rate.

What this means is that your interest rate will reach a maximum limit that it cannot exceed. Let’s say you have an interest rate cap of 3%. If the floating mortgage rate goes above this level, you will still only have to pay 3% interest.

If the mortgage rate falls below 3%, your interest rate will follow. With this method, you can continue to have variable interest rates, while protecting yourself from sudden increases that risk burning holes in your wallet.

As a compensation, you must pay a premium to the lender that you pay on an ongoing basis during the loan term.

Fellow applicant

As stated earlier, the lenders are very keen on the customers being able to repay the loan. That’s how they make money. People who have a stable economy will generally receive better interest rates than anyone with financial problems.

However, to strengthen their ability to pay off the loan, you can apply for a loan together with a co-applicant. This means that the lender has two people’s finances which are in collateral for the loan. Of course, this is only positive if both people have a good credit rating.

If you have someone who has several payment notes as a co-applicant, you can ruin the chances of an advantageous loan.

Think about this before you borrow!

In order for you to be able to be offered the best possible interest rate, which, in one event, is the same as the lenders market, it is important that your finances are in order and what is of greatest focus is the forecast for payment setting (risk forecast).

Read more about what factors the lenders are looking at most and how you can do to improve your credit rating and thus also your opportunities to get better interest rates on private loans.

Compare companies for better interest rates

However, it is not only your finances and the type of loan you take that determines what interest rate you receive. There is free pricing in the loan market and this automatically means that there is a gap between the cheapest and the most expensive lender.

Thus, there are good reasons to compare lenders and primarily turn to the lender that offers the lowest rates, ie the lowest interest rate. It is very important that you compare lenders, but you must also make sure to do it properly.

Compare the interest rate correctly

For example, you cannot compare a credit company that offers private loans of up to SEK 20,000 with a major bank from which you can borrow up to SEK 600,000 or even more. When you are looking for low interest rates, it is also crucial that you understand that the interest rates displayed in large signs on websites, on TV commercials and in newspaper advertisements are so-called list prices.

These interest rates are exemplary interest rates and there is no guarantee that when you apply for a private loan, you will receive the interest marketed.

How crucial is the credit report?

When submitting a loan application, the lender is required to do extensive credit checks to see how your finances look. This is usually always done by taking a credit report.

What is a Risk Forecast?

The risk forecast is central to the lender because it shows the risk that you cannot fulfill your obligations under the loan agreement. The forecast is usually written as a percentage (it is standard among other things at UC) and the lower the percentage the better.

With a high risk forecast, you can expect to pay a high interest rate on your private loan, if you are even granted the loan. With a very low risk forecast, the interest rate you are offered may approach the lender’s list prices.

What does credit risk mean?

What controls the risk forecast is above all your ongoing finances and how your credit history looks. The current economy is analyzed on the basis of factors such as total income, deficit of capital, total credit utilized (balance) and credit granted (limit). The higher the income and the lower the balance of utilized and granted credits, the better.

With regard to your credit history, payment remarks are of course central, but the analysis normally also includes the number of inquiries during the last 12 months.


credit score

Obviously one of the best ways for you to get as low interest rates as possible is to have a good credit rating. Your credit rating is a way for lenders to measure how good your finances are. There are many factors on which credit rating is based.

These include things like your income, living situation, housing and previous loans. You can read more about credit rating here.

It is difficult to overestimate how important your credit rating is to your interest rate. If it is too high, the lenders cannot be sure that you will be able to pay off your debts. There is even a risk that your loan application will be rejected completely.

If you have applied for several loans for a short period of time, the credit reporting companies will see this. Many credit reports for a short period of time are considered a risk, as the lender can conclude that:

  1. You have applied to several lenders but have not been granted the loan, which may indicate poor finances
  2. You have incurred several debts for a short period of time and therefore have large expenses

Therefore, be extra cautious about applying to several banks out of pure frustration, instead use a loan broker if you are unsure of your credit rating.


In general, you can get a very low interest rate on private loans if you have a good economy, compare lenders and choose the one with the lowest average rates. However, you are not guaranteed to get the lenders sample interest rates because the interest rates are set individually.

This is where the risk forecast determines what interest rate you will receive. You can improve your chances of getting good interest rates on your private loan by increasing your income and / or arranging your credit history. Some banks also offer an interest rate cap, which limits how much interest you may have to pay.

Finally, you need to consider whether you should have variable, fixed or interest rate ceilings.

Fast loans, private loans and mortgages all have different costs and interest rates. You can quickly and easily compare the different lenders for the different types of loans here:

  • Instant loans
  • Consumer Lending
  • Mortgage loans