Find the best and cheapest car loan without collateral

Car loan – Loan for a car

Most Norwegians aged 18 and above depend on a car. Many even have more than one car. This includes those who need their own car for work, couples who work in different locations, and those who have cars as a hobby. In addition to most Norwegians relying on having a car, it has also become a major status symbol. Car enthusiasts also know that a car with status does not have to be a new model. It can just as well be an older model that has been refurbished.

When you are going to buy a new car, it is easy to think that the only type of loan that works is a car loan. That does not have to be the case. Car loans have their advantages, but in many cases it is actually wiser to use other loan methods than a car loan.

Benefits of borrowing for a car via Nanofinans:

• No collateral in the loan
• Multiple lenders compete to give you the best offer
• Flexible repayment period on the loan

What is a car loan?

A car loan is the first method of financing many people think of when they are going to buy a car. It is not hard to understand why, since it is called a car loan. This type of loan also comes with some nice advantages, such as a low interest rate. What many people do not know, however, is that there are several loan methods you can use to buy a car, and a car loan does not necessarily have to be the best option in all cases.

Norway is the country in Scandinavia with the most cars per person. There are 2 people per car in Norway, in Sweden there are 2.1 people per car, and in Denmark there are 2.4 inhabitants per car. Norwegians are therefore above average fond of cars. 

Even though we in Norway buy more cars than people in comparable countries, it does not mean that the average Norwegian can buy a car out of pocket. Most people need to borrow money to afford a car, whether it is a vehicle in the higher or lower price ranges.

Did you know that?

We can help you with more than just finding the absolute best car loan. Whether you are looking for a boat, snowmobile, caravan, or motorcycle, we are here to help you get the best loan.

The fact that most people believe that a traditional car loan is the only way to borrow money for a car is incorrect. In fact, there are several alternatives, and some may even be better suited in certain cases. Car loans are also more difficult to obtain than, for example personal loan. In addition, personal loans come with some advantages that car loans cannot offer.

The advantage of borrowing money for a purchase from a car dealer is that they have greater flexibility to negotiate the price of the loan. You can also take out a loan to buy a car as a bank loan or as an online loan. The only thing that can actually prevent you from getting a car loan is a possible registration with SIS, the Norwegian National Collection Agency.

Compare your way to the cheapest loan where you can borrow between 5,000–800,000 kroner

Save thousands of kroner by choosing the right car loan. Get familiar with the main concepts that apply to loans and explore the market so that you are well prepared before you go to your car dealer. In this article, we will therefore guide you through concepts and pitfalls.

Like all other forms of financing, car loans can be difficult to figure out. It may therefore be worth spending a few late evenings exploring the car financing market. You can get a loan for a car purchase from car dealers, banks, lenders, and mortgage banks. However, there are many individual requirements that apply when you are trying to find the cheapest car loan.

Alternatives to car loans

As we have mentioned earlier, Norwegians buy more cars per capita than our comparable neighbors such as Swedes and Danes. Even though we buy so many cars, most people in Norway still need help financing the car they are going to purchase, whether it is used or new.

Personal loans, green car loans, and consolidation with mortgages are three good alternatives to a traditional car loan. These three methods of borrowing money for a car each come with their own advantages and disadvantages and are suited to different types of car purchases. But regardless of whether you are looking for a new, used, old, or newer car, there will always be a loan that suits you. To find the best possible loan for you and your needs, you should apply for a loan through us. By doing so, several different lenders will see that you are looking for a loan. Using this method creates competition among lenders. They will then push their prices as much as possible to get you as a borrower.

Another method some people use is to combine the car purchase with their mortgage. This is primarily for those who are in a messy financial situation and struggle to keep track with even more bills each month. Using a loan to sort out a messy financial situation is, by the way, called refinancing.

The third method that is very popular to use when buying a car is personal loan. Personal loans are suitable for cheaper car purchases. When it comes to buying new cars over 500,000 kroner, personal loans are not a good fit.

• Tip: Find out what you value in a loan

There are therefore several other alternatives than just traditional car loans for buying a car. The different types of loans each come with their own advantages and disadvantages, and they are suited to different situations. But what about a regular car loan, you might ask. 

Regular car loans are, after all, the most popular type of loan for buying a car, so naturally they also come with their advantages. Traditional car loans have lower interest rates than personal loans and can be used for all types of cars – unlike a green car loan.

If you buy a car through your mortgage, the bank takes collateral in your home, but if you buy with a regular car loan, the bank or lender takes collateral in the car. It is definitely more ideal to have collateral in your car than in your home. If you do not want the lender to take any form of collateral at all, then a personal loan would be the right type of loan for you.

Regardless of which type of loan looks best on paper, it is always wise to weigh the advantages and disadvantages. It is important to figure out what you personally value when it comes to a loan. If you are going to buy a new and expensive car, it may be ideal to get the lowest possible interest rate. Car loans, green car loans, and combining with a mortgage offer the lowest interest rates. 

These types of loans are, on the other hand, quite complex to deal with and difficult to obtain. In addition, the bank will require collateral in either the car or the home. For those who want to buy a used car that is not in the highest price range, a personal loan may be ideal. Personal loans are very easy to both obtain and manage. Banks also do not require any collateral for a personal loan. Note that a personal loan may be somewhat more expensive than other types of loans.

What is a green car loan?

Electric and hybrid cars are becoming more and more popular. Along with this trend, a renewed version of the traditional car loan has emerged, namely a green car loan. A green car loan offers better terms than a traditional car loan, including slightly lower interest rates

The following types of cars qualify for a green car loan:

• Electric cars
• Hybrid cars
• Cars with lower CO2 emissions than 120 grams per kilometer

Something many people believe when it comes to taking out a green car loan is that the car must be electric. That is not the case. Both hybrid cars, and even some diesel and petrol cars, can qualify for a green car loan. All cars with CO2 emissions lower than 120 grams per kilometer qualify for a green car loan.

Car loan with payment remarks

Many people end up in an unfortunate financial situation and receive payment remarks. In this context, many also wonder whether it is possible to take out a loan with payment remarks. Unfortunately, it is not possible to take out a loan in Norway if you have received a payment remark.

• You cannot get a loan in Norway with a payment remark

As soon as you find yourself in such a situation, it is wise to focus on getting out of it as quickly as possible. If you have received a notice that you will get a payment remark, you have 14 days to settle the debt. If you are unable to obtain enough funds within those 14 days, you can submit a complaint form. Even though this complaint will not get you out of the situation, it can at least give you extra time to secure enough funds.

• Tip: Submit a complaint within 14 days to get extra time to obtain sufficient funds

One idea if you do not have or will not get enough capital right away is to ask family and friends for help. It is a greater shame to have a payment remark than to ask for financial support in difficult times. Many will also likely find it rewarding to help. No matter how much you are able to borrow from family and friends, it is a step closer to getting out of the situation. 

To get a loan for a car or anything else, you must do your best to get rid of the payment remark as quickly as possible. Once the debt is paid, the payment remark will be removed and you can take out a loan again.

Buy a car with a personal loan

As you have read earlier in this article, there are several alternatives to car loans when buying a new car. One of the most popular methods when it comes to purchasing used cars and cars that are not in the highest price ranges is a personal loan. A personal loan is a type of loan that comes with a number of advantages when buying a car, but also some disadvantages.

A very neutral advantage that many people like is that banks and lenders do not require any collateral for personal loans. When using other types of loans, the bank will usually require collateral in either the car or the home. 

When a bank or lender takes collateral in something, it means they have rights to that specific physical asset. If you fail to make payments on time, the lender can actually seize your home or car. To avoid losing sleep over that, a personal loan can be a good option. When you buy a car with a personal loan, the lender does not take collateral in anything at all.

• Personal loans are easy to obtain and manage.

Personal loans are perhaps also the easiest type of loan to get approved. This means that many people take out personal loans without thinking it through properly. Even though personal loans are relatively easy to obtain, it is always important to think carefully before taking out a loan, no matter which type. It is easy to fall into the trap of making impulse purchases. 

An example of this is seeing a car you want and taking out a loan for it the same day. This is never a good idea. You should always have a plan for how much you need, how you will repay it, and how much you can realistically afford to pay each month. If you do not have a plan, it can be easy to get into trouble, even with a small personal loan. Also try to account for a car loan calculator.

When borrowing for a car, most types of loans are complex and complicated to deal with, but this is not the case with personal loans for cars. Personal loans are perhaps the simplest type of loan to deal with. Such loans are very straightforward.

How to get a loan to buy a used car?

A classic car loan is taken out either through your bank or through your car dealer, and the new car is used as collateral for the loan. However, with used cars this is usually not an option, as used cars have a lower value and quickly depreciate further.

Therefore, if you need to borrow money for a used car, it will be necessary to take out an unsecured loan. You can find an overview of the market for car purchase loans further up on this page.

How long does it take before I receive the money?

Most online lenders approve you quickly - some even within 15 minutes. Compare lenders here at Nanofinans before making a decision on which loan to choose. Also check in advance whether you actually have room in your budget to repay a car loan, so that you do not run into financial problems.

How does a car loan work?

It is quite simple. You first need to figure out how much money you need to buy your dream car. Then you assess your personal finances and see whether you can actually afford to repay the loan and how much you can pay each month.

Then you check what offers the different lenders on the list above can provide you and submit loan applications to several of them, and then choose the one that is best and cheapest for you.

What should I do if I change my name, address, or similar?

Most car loans are applied for using BankID. If you change something, for example an address that is reported to your municipality, your BankID will also be updated and your lender will be aware of your new address. If you are unsure whether you applied with BankID, it is a good idea to contact your lender to make sure everything is updated.

Five good tips for your car loan

Car buyers often do not have the opportunity to arrange financing in advance. Many therefore first see a loan offer from the dealer and must quickly decide on interest rates and other costs. Therefore, find the best car loan before going to the car dealer.

You literally need to be ahead of the game when it comes to researching the market before you go out to test cars at dealerships. Suddenly, you may have your dream car right in front of you and a financing offer in your hand. But is this also the best car loan for you?

You get the best car loan by preparing yourself. Follow the advice below and be ready for your upcoming car purchase.

1. Be ahead of the game

There can be a lot of money to save by choosing the right car loan. However, many people forget to research in advance what options are available and are therefore easily tempted by the car dealer’s financing offer. This does not necessarily have to be a bad financing method, as the interest rate is often low, but the setup costs can be high.

The dealer’s base commission is the dealer’s compensation for arranging the loan and serves as a starting point for negotiations. So check in advance what suits you best.

2. Compare prices based on the APR value

Many understandably find it difficult to determine the price of a car loan. In addition to the interest rate, there are setup costs and possibly other ongoing expenses.

All loan costs are summarized in a comparable concept: APR. It is an abbreviation for annual percentage rate, which can be seen as the unit price of money. If you want to compare car loans, you should therefore use APR to get an overall overview. Not all dealers are equally good at informing about APR, but you have the right to be informed about it.

3. Fixed or variable interest rate

You can choose a car loan with either a fixed or variable interest rate. Fixed rates currently cost a bit more per month, but in return they give you budget certainty throughout the entire loan period. With a variable rate, you can take advantage of the low interest levels today and in the near future. However, there is no certainty about how much the interest rate may increase. If you choose a car loan from a lender, the interest rate can often be negotiated.

4. Repayment of a car loan

Most people take out car loans because they need or simply want a new car. However, you should be aware that you must always pay all setup costs, which are part of the remaining debt. On the other hand, you save future interest if you repay the loan earlier than agreed. Check in advance what costs are associated with repaying the loan.

5. 14-day right of withdrawal

Few people know that there is usually a 14-day right of withdrawal on a financing agreement with a car dealer. However, you should be aware that the purchase itself, and thus the car purchase, is binding, and that you therefore need to find another financing solution.

Calculate the cost of your car loan

You can find out what your car loan will cost with individual lenders, so you can be sure to get the cheapest car financing on the market. By using filters to narrow your search, you get prices from providers in the market and can quickly see which deal will be the best for you.

Nanofinans makes it easy for you to save money because you no longer need to collect prices from individual lenders.

Some lenders charge a fixed fee for setting up the loan, while others charge a variable fee. This means that a lender with a fixed fee will typically be the cheapest if you take out a large loan, while a lender with a variable fee is better for smaller loans. Therefore, keep a close eye on the APR; the lower the APR, the cheaper the total loan will be.

Compare car loans on Nanofinans

When you compare car loans, be aware that there are more costs than just interest. It is therefore important to compare APR (annual percentage rate) to find the car loan that is cheapest for your situation. APR includes all fees associated with taking out a loan, so you can be sure to get the clearest possible result.

The cost of car financing can vary depending on what your loan includes. Therefore, banks are not always the cheapest solution, as prices and fees vary depending on the type of loan you need.

If two loans have the same APR, it is most advantageous to choose the loan where interest makes up the largest portion compared to fees. Interest expenses are tax-deductible and can therefore be deducted from your taxes. This does not apply to fees.

Car loan in the bank

There is a big difference in what a car loan costs across different banks. Large banks also have different pricing depending on your customer relationship.

At the same time, several banks and lenders offer affordable financing if you are already a member of a specific trade union or organization. Therefore, check the prices carefully and assess, based on an overall evaluation of your finances, whether it would be beneficial to switch banks in connection with a car purchase.

Car loan through a car dealer

Alternatively, you can get the car financed through the car dealer, which can be appealing when you are at the dealership.

It may immediately turn out to be just as cheap to finance the car through the car dealer’s finance company as through the cheapest banks. This applies especially to expensive cars, as interest rates are generally lower with car dealers, while setup costs are higher.

It is absolutely crucial that you know what alternative financing, for example from your bank, would cost. The car dealer receives a commission for arranging the loan. In addition, dealers usually add a fee of 2,000–6,000 kroner on top of the loan.

• Setup costs

Since setup costs are not tax-deductible, a loan taken through a car dealer with a low monthly gross payment and a low annual percentage rate (APR) before tax may actually end up being more expensive than a comparable bank loan. You therefore need to know the APR value after tax in order to see which loan is the cheapest.

Therefore, it is also important that you are willing to negotiate the car costs with the car dealer if the financing takes place there. If you take out a car loan provided by a car dealer, you generally have a 14-day right of withdrawal. However, this only applies to the financing and not to the car purchase itself.

Do your homework!

Car financing is a source of income for the car dealer, along with things like insurance, the price of the new car, and the price they will pay for the car you may trade in. It is therefore important that you have done your homework before visiting the car dealer, as it can quickly become difficult to keep track of when the different elements are mixed together.

We therefore recommend that you explore options for both car financing and insurance in the same way you would check the price of cars before making a purchase. It is worth the effort to spend a little time investigating car financing options.

Regardless of who you are, you can easily save thousands of kroner by choosing the right type of financing or lenders.

How to get the best APR on a car loan

Annual Percentage Rate (APR) for a car loan is the yearly interest rate on the money you borrow from a lender. The APR includes any taxes on the vehicle and any interest and other financing costs that are all included in your loan.

With a low APR on a car loan, you save money on your monthly payments and on the total amount paid in interest. Finding this takes some time, but you should find the best APR before taking out a car loan.

Part 1 of 3: Research your options

The first step when looking for a car loan with APR is to research what options you have. Part of this includes getting a credit assessment and checking how your credit score stands. Your credit score is one of the biggest factors affecting the APR you qualify for.

Another thing you should do is compare the interest rates offered by the different lenders you are interested in using and find out how the age, brand, and other factors of the vehicle can affect the APR value.

Step 1: Get a credit assessment. Start by getting a copy of your credit report and check whether you have any late payments, payment remarks, or other negative information. Make sure it is accurate and free of errors.

Step 2: Check your credit score.

Note: Although the credit score you receive will not always be exactly the same across different credit rating agencies, it will still give you an idea of how high your score is.

Step 3: Check with your credit card company. Another option is to check with your credit card company to see if they provide free credit information. Many credit card companies offer this as a service to their cardholders.

Step 4: Compare the interest rates offered by the different lenders. Find the best interest rate.

Step 5: Gather the necessary documentation. Collect all required documents requested by the lender. Loans with low documentation requirements often come with a higher interest rate.

Step 6: Consider two or three different car models. Some models may come with a higher interest rate.

Part 2 of 3: Compare interest rates

Once you know your credit score, compare the rates offered by the lenders you are considering using. Among the different lenders you are evaluating, find the best price and terms available for the car loan.

Step 1: Check with your bank. Speak with your local bank to find out what interest rate they can offer you. You can also check with local credit companies. Interest rates are often slightly lower here than at traditional banks.

Step 2: Call the dealer. Find out the interest rates at different car dealerships in the city by calling them and asking to speak with the finance department.

Car dealerships often offer special deals, including discounts, and can provide some of the best financing terms available.

Step 3: Apply for your car loan online. Because today you can submit all documentation online, you are not limited to local financial institutions.

Part 3 of 3: Arrange the financing.

Now that you have chosen a potential lender, gather all the required documents to send to the lender you selected. Remember that loans with low documentation requirements often come with a higher interest rate.

Step 1: Get pre-approved for the loan. Get pre-approval for the loan before buying a vehicle. That way, you can focus only on vehicles within the amount you can borrow.

Even if you have not yet decided on a specific lender, you can use the pre-approval as a negotiation tool.

Step 2: Choose the loan term. Choose a shorter loan term for your car loan, as this often comes with a lower APR.

The downside of a short-term loan is higher monthly payments. But if you are comfortable with higher payments, it can be a good option.

Step 3: Bring your pre-approval to a car dealership and see if they can offer you better terms. Bring a pre-approval to a car dealership to see if they can beat the terms you received. Most dealers are willing to secure a sale, which may allow them to lower the APR they offer in order to get you to finance the vehicle through them.

Step 4: Pay as large a down payment as possible upfront. Increase your down payment to give yourself more room for negotiation.

By increasing the amount you pay upfront for the car, you reduce the amount you need to borrow. Combined with a lower APR, this can significantly reduce the total cost of the loan over its term.

Step 5: Ask about discounts. Find out if you can replace some of the included bonuses with a lower APR option. This can include cash discounts or special packages that you can do without.

Tips: If you cannot get a low interest rate now and you need the car, choose the best loan available and then refinance after six months for a better rate. Refinancing to a lower rate can save you a lot, especially if the rate drops by one or two percent.

Step 6: Compare two or three vehicle models. Some models may come with a higher interest rate.

Finding a loan with a low APR is a safe way to save money when financing a vehicle. Just remember to get a vehicle inspection before buying a used car.

What should you remember when taking out a loan to buy a car?

Of course, there are many things to consider before buying a car. When it comes to the financing you choose for your car, you should especially consider three things:

• Car loan with or without a down payment.
• Loan term
• Loan amount

First of all, you need to know how much of the car’s price you can pay in cash, or whether you can pay anything at all. If you pay part of the total price in cash, you will typically get a lower interest rate on the car financing. A good rule of thumb is: the higher the percentage you can contribute upfront, the lower the interest rate you will get on the loan.

You should also consider the loan amount; how expensive a car can you afford? When you adjust the filters on this page, you can see that the monthly payment also changes. You need to make sure you have enough room in your budget to cover the monthly payments, otherwise you may need a car loan with a longer term or choose a cheaper car.

Cheapest car loan

The price of a car is a relative factor. You naturally want to get the most and best possible car for the money you pay for the vehicle. The money you use to repay the loan, meaning the car financing, is a key factor. There is a lot of money to save by finding the cheapest car loan.

But it is not always easy to spot, even in clear daylight. Different lenders may offer several types of car loans, and in the end, it is only after they have done a full credit assessment of you that you receive an offer showing how much it will actually cost you.

How to read the loan offer

When you receive loan offers from different lenders, for example after an application submitted through Nanofinans, you need to compare them. This applies both to a car loan secured by the car and a personal loan you want to use to buy a car.

Assuming the same loan amount is used in all offers, there are two figures that are especially important. These are the effective interest rate and the total amount you have to pay on the loan.

The effective interest rate includes not only the nominal annual interest rate but also additional fees, such as setup fees and monthly administration fees.

The total cost of the loan, which must also be stated in the loan offer, is the total amount you have paid once the loan has been repaid according to the agreed term.

These two figures are therefore the best way to compare loans.

This forms the basis of the offer you receive.

When a lending institution receives your application, it assesses your income and expenses. The most important factor is that you have a stable income. The higher it is, the better, of course.

On the cost side, special attention is given to how much debt you already have. Having many existing debts will limit your ability to take on additional loans. Authorities have set a maximum total debt limit of five times your annual gross income in regulations that apply to all lenders.

Your past payment history will also be reviewed. If you have a registered payment remark, you will always be rejected. The good news is that once you settle the debt behind it, it will be removed permanently. No lender will be able to see that you have previously had a payment remark.

The credit assessment decides.

Finally, there are also some statistical factors such as age, where you live, and whether you have a fixed or variable income. However, these are secondary to the factors mentioned above.

A combined analysis of all these factors is called a credit assessment. It determines how much you can borrow and what interest rate you will be offered.

But there can be larger or smaller differences in how lenders assess your application. That is why you may receive different offers, and why it is a good reason to apply in several places, for example through a single application via Nanofinans.

Greater flexibility with personal loans for a car purchase.

A car loan secured by the vehicle being purchased will always come out best in such a comparison of interest rates and payment costs.

At the same time, there is also a requirement that the car must be fully insured (comprehensive insurance). You must keep this until the loan is fully paid off. The lender will, of course, secure its collateral in the best possible way. If you damage your car, they will receive the money from the insurance company.

If it is a personal loan, meaning an unsecured car loan, you decide what type of insurance you want. If it is an older model and you generally drive carefully, it may be a cost you can do without. This is definitely a factor to consider when choosing the cheapest car loan.

You are also not free to sell the car as long as the lender has a lien on it. You must usually apply for permission. They want full control to ensure they recover the money from the sale price. This can be inconvenient when you want to change cars. With a five-year repayment period, the need to change vehicle may arise during that time.

If it is a personal loan, the process is much smoother. You sell the car yourself, pay off the personal loan, and if needed apply for a new loan for a new car at the same time.

Find the best car loan in Norway

To find the best car loan, you need to know what to choose. If you have any general questions about this type of financing, you can check our loan FAQ, which gives you answers to the most common questions you may have.

Hvis du er i tvil om de mer praktiske detaljene om billån, se vår låneguide. This guide can give you a good understanding of how to apply and what you should pay special attention to.

Find Norway’s cheapest car loan with Nanofinans

We hope this article has given you a better understanding of how to go about finding the best car loan for you and your needs. Make sure you understand these things well before making a decision and avoid getting into financial problems.

We wish you good luck with your new car and success in your loan search.

Good luck!