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May 16th, 2022

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If you are starting to get settled into daily life of Copenhagen and the initial excitement of arriving in this one-of-a-kind city is starting to be overshadowed by the routines of daily life, you’re not alone. This is a point that everyone hits eventually and is a natural part of being an expat.

But with this new challenges to tackle often arises. There are a lot of things that are fantastic about living and working in Copenhagen but dealing with paperwork and administrative undertakings is not one of them. Even though enormous strides have been taken in making it easier for people to get settled in the city, everything is still not crystal clear.

One of the things that is not often discussed when getting your ropes around you in a new country is how mundane and regular things work in practice. One of these things are loans. If you’ve moved to Copenhagen and Denmark from a Scandinavian country you will find a whole lot of similarities. In this text we’re going to provide a crash course in how loans in Denmark work, as well as some handy tips that can help you get approved for a loan when you need it. We are also going to talk about quick loans, something that has grown in popularity

This is what you need to be eligible for a loan in Denmark

As with most loans in other countries, you need to be a permanent resident of Denmark. This is no issue if you’re a citizen of a country in the EU, but can come with some issues if you’re still getting your bearings and waiting on a decision from the various government agencies.

You also need to have a permanent address as well as a CPR-number. Your CPR-number is your key to being able to participate fully in Danish society and is something that will open a number of doors for you. At least on paper you do not need to be employed by a Danish company, but it certainly won’t decrease your chances. All in all, the things that you need to be able to provide to the institution issuing your loan does not differ all too much from standard banking practices worldwide.

Taking out a loan with a bank

If you haven’t started the process of getting a bank account in Denmark yet it is very wise for you to start that process immediately. Opening an account with a large Danish bank is in general free of charge, but the wait times and paperwork that this entails can be massive. Therefore it is wise for you to start the application process soon even if you don’t need to take out a loan in the foreseeable future. Having been a customer for a period of time will increase your chances of getting the loan approved.

Therefore, it is also wise to start taking your salary directly into your Danish account. This will show the bank that you are a serious customer and not just someone using the bank to take out a loan. Banks are looking for assurances that you will pay off your loan on time and having established a relation ahead of your application will help you in getting approved.

What can one take out a loan for? 

Once again, not much is different here compared to other countries. People take out loans for all manner of different things, but the main two sectors are larger expenses such as buying a car, and taking out a mortgage to purchase a home of some kind. Deposits in Copenhagen have also reached astronomical proportions, something that has led to many renters needing to take out a loan to be able to move into an apartment.

But there are also different types of loan that have become very popular in Scandinavian countries in the last decade. We’re going to run you through what these are in the next paragraph, and even though these loans may not be suited to your current situation it’s still something that can be wise to have a brief understanding of.

What is a forbrukslån?

A forbrukslån or quick loan as translated to English, is as the name implies a form of loan (or lån in Danish, Norwegian, and Swedish) that is very easy to get approved for and that often pays out within minutes. This has become very popular in Scandinavian countries as it is much easier to get approved for these loans. They can be a powerful tool when used correctly, but they are often also associated with high interest rates. This can be something that you can use, but we cannot stress the importance of making calculations before you take out these types of loans. Check out forbrukslån.no to read more about forbrukslån.

Summary  

All in all, not too much is different from taking out a loan in the rest of the world. The things that you need to be vary of however are. Make sure that you’re up to speed in getting settled and getting all the various paperwork approved and try to get approved for a Danish bank account as soon as possible. Copenhagen is an expensive city and taking out a loan to be able to finance various things is one of the ways to improve your living situation.

As with everything in Danish society, things become much easier once you are in the system. You don’t need to be a citizen to take out a loan, but having a permanent base and a form of income is required. Remember to do calculations and budget accordingly.

As always when one takes out a loan it is your own responsibility to make sure that you have understood everything that the loan encompasses. Hopefully this text has been able to give some clarity into how Danish loans work and what you need to keep in mind when considering taking out a loan.