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What Norway Can Teach Us About Car Loans

Posted by : Premraj | Posted on : Monday, August 26, 2019


Norwegians call it billån, but even if the word literally translates to “car loans,” these budget-conscious Northern Europeans have a unique way of approaching it. You see, Norwegians are very meticulous when it comes to managing their finances, making them devote careful consideration when it comes to taking out loans. In a sense, this attitude is indicative of the general attitude of the whole country when it comes to financial matters. It is no wonder why Norway’s financial strategies made it one of the most financially stable economies in the world.

Buying a car or other vehicle in Norway can get quite pricey. Apart from the price tags on cars, the taxes that come with it can also get expensive. The Norwegian government taxes cars according to their weight, which means that the heavier and the bigger your car’s engine is, the higher your tax will be. Norwegians are understandably conscientious when taking out car loans, and we can pick up a thing or two from the way they approach the matter. Below is the decision-making process of most Norwegians when considering a car loan.

Take Thorough Stock of Your Finances

The thought of driving a brand new car, truck, SUV or other vehicles complete with all the bells and whistles tends to blur out your bigger financial picture. Before you get tunnel vision, it is important to remind yourself not to lose focus on your financial considerations. For instance, you may also be paying for your home, saving up for your children’s college fund or are about to undertake major home improvement. Taking all of your present and future expenses into consideration will help you make a better decision on the kind of car to purchase and the car financing plan to suit your current and projected financial conditions.

Factor in Your Credit Score

You may want to delay applying for a car loan if you are not doing too good as far as your credit score is concerned. Credit scores are crucial in terms of the interest rates that you’ll receive on your loan. Good credit scores will likewise earn you promotional offers from dealers like freebies, discounts, and cashback. Double-check your credit scores, paying special attention to negative marks, which may be erroneous entries. Report these items by writing to the credit reporting company.

Be Wary of Dealers

Make sure to shop for other financing options beyond dealerships and compare the total cost of your overall car purchase. You may find yourself overwhelmed by supposed promos, bonuses and cashback offers. However, most of these offerings are only available to highly qualified buyers.

Don’t Overlook Credit Unions

Assuming that Norwegian credit unions work similarly as those in the United States, it wouldn’t be surprising to see them considering credit unions for car loans. This is because credit unions generally offer lower interest rates, and the financing is more flexible than with traditional lending institutions.

Earn Your Pre-approval

Things will be far easier if you can get your lender, whether it is a bank or a credit union, to pre-approve your application before you visit your car dealership. This will help you become more confident that you can manage your loan and get everything that you want in your new car.

The key to all these tips is to exercise due diligence throughout the process of securing a car loan. By being as prudent as many Norwegians are in this regard, you can rest easy knowing that you are thorough in ensuring that you made the right decision in taking out a car loan.

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