The Credit System in Norway – Basics
The Norwegian credit system has its own specific rules. You can get a loan if you have a permanent personal number and sufficient creditworthiness. Banks assess your income and financial obligations, and missed payments can make it harder to get future loans.
Interest rates, especially on mortgages, have increased in recent years—from around 2% to nearly 5%. As a result, many borrowers now face significantly higher monthly payments. Consumer loans are even more expensive, often with annual interest rates in the double digits.
You can apply for a loan online and sign the agreement electronically. Banks require documents confirming your income and that you have no outstanding debts. It’s important to fully understand the loan terms to avoid unfavorable financial commitments.
Loan Refinancing – How Does It Work?
Refinancing a loan means replacing your existing debt with a new one on better terms. You take out a new loan to pay off the old one, often with lower interest rates or a longer repayment period. This can significantly reduce your monthly payments or the overall cost of the loan. You can refinance a single loan or combine several into one, which works like debt consolidation.
Example: Adam had three debts—1,500 NOK for a car loan, 1,000 NOK for a credit card, and 800 NOK for another loan, totaling 3,300 NOK per month. After consolidation, he now pays one installment of 2,000 NOK. Although the repayment period is longer, he feels relief thanks to lower monthly costs and better financial organization.
The process involves finding a bank with a better offer, applying for a loan, and using the new loan to pay off previous debts. This way, you have only one, more manageable loan, making it easier to control your budget. Refinancing doesn’t increase your debt unless you borrow extra money—it’s a tool for financial optimization.
When Should You Consider Refinancing?
Refinancing a loan isn’t always necessary, but in some cases, it can greatly improve your financial situation. Here’s when it might be a good option:
- High monthly payments – If a large portion of your salary goes toward loan payments and you’re struggling to cover other expenses, refinancing can help lower your costs.
- Difficulty repaying – Late payments, bank reminders, or debt collection are signs that your debt is becoming unmanageable. Refinancing can help reorganize your obligations.
- Unfavorable loan terms – If you took out a loan with poor conditions, switching to another bank might get you a lower interest rate and better terms.
- Multiple loans – Consolidating several loans into one reduces the number of payments and makes budgeting easier.
- Need for extra funds – If you have good creditworthiness, refinancing can allow you to borrow additional money for things like home renovations or buying a car.
If any of these situations sound familiar, refinancing could help you reduce your payments and simplify your finances.
What Are the Benefits of Refinancing?
The main benefit of refinancing is saving money through lower interest rates, which can reduce your monthly payments by several percent. For example, refinancing a loan with a 5,000 NOK installment could save you a few hundred kroner each month, leading to significant yearly savings.
How to Check If You Can Lower Your Loan Payments?
Before deciding on refinancing, it's important to analyze your financial situation carefully. Here’s a step-by-step plan:
- Gather information about your loans – List all your debts, including loans, credit cards, and other obligations. Write down key details: remaining balance, monthly payments, interest rates, fees, and repayment terms. Tools like GjeldsMonitor can help you keep track of everything in one place.
- Compare market offers – Check what interest rates and conditions other banks offer. If you're paying 15% on a loan but other banks offer 10–12%, refinancing might be a good option. You can also use a loan broker to help find the best deal.
- Calculate potential savings – Use online loan calculators to see how much you could save by refinancing. Compare your current payment with a new one under better terms, such as a lower interest rate or a longer repayment period. Don’t forget to consider any additional fees.
- Consult an expert (optional) – If you’re unsure about the calculations, a financial advisor can help you analyze offers and identify where you can save money.
By following these steps, you can determine if refinancing is worth it. If the conditions are favorable, you can take action. If not, you’ll at least have peace of mind knowing you’re not overpaying.
When Loans Become Too Much to Handle…
Sometimes, financial situations spiral out of control—job loss, illness, or impulsive borrowing can lead to serious debt problems. Ignoring the issue will only make it worse, so take action immediately.
- Contact your bank – Banks prefer to negotiate rather than push customers into bankruptcy. You may be able to get a payment deferral or lower your monthly installments.
- Consider debt consolidation or refinancing – The sooner you act, the better the chances of securing favorable terms. Even if you’ve fallen behind on payments, it’s still worth trying.
- Seek professional help – In Norway, you can get free assistance from an expert who can help create a debt repayment plan or negotiate with creditors. Don’t deal with the problem alone—help is available..
Contact an Expert – You Don’t Have to Handle It Alone
Finally, we encourage you to talk to an expert. If you’re unsure about your loans or want to lower your payments, professional advice can help. A specialist will analyze your debt, income, and expenses, suggesting solutions like refinancing, debt consolidation, or negotiating with the bank. This can save you both time and money.
A consultation is non-binding and often free—if the expert finds you a better loan offer, their fee is covered by the bank. It costs you nothing, but you could gain much better loan conditions.
Take the first step—review your loans and reach out to an expert.