Consumer Loan Dictionary – About Consumer Loans Concepts and Meanings


Check out our review of concepts and their importance to be better equipped to find the best and cheapest consumer loan.

Repayment – What does repayment mean?

Repayment - What does repayment mean?

Repayment is the amount you pay off on your loan on an ongoing basis. It can either be on a monthly basis, as with consumer loans, or on a quarterly basis as with mortgage loans. The term is different, but the deduction is the amount that your debt becomes less. There is therefore a difference in the amount of the repayment and then the total amount you have to pay to the lender (the monthly payment). The two concepts must not be confused with each other.

Debtor – What does the debtor mean?

Debtor - What does the debtor mean?

A debtor is a legal entity that owes money to someone. In most scenarios, the consumer will be a debtor while the company will be a creditor. Whether you are borrowing money online or buying an expensive TV on installment. If you have debts, you will therefore be a debtor.

Effective interest rate – What does effective interest mean?


The effective interest rate (the borrowing rate) is defined by the annual interest rate, including interest on interest. It is a percentage that has many synonyms, which merely strengthens the confusion of many. In the loan context, it will often be the borrowing rate mentioned on the web. The effective interest rate gives a good indication of the price level, but it is clearly the annual percentage rate of charge (APR) that is most important.

Consumer loans – What does consumer loans mean?

Consumer loans - What does consumer loans mean?

Consumer loans are a broad term for a type of loan where the purpose is to buy consumer goods. It can be a new kitchen, a holiday or expensive service. Whether you record it online or in the bank, it will typically be made without you providing security behind. This entails a higher level of interest than you eg. know from home financing.

Applicant requirements and the degrees of freedom to spend the money as desired may differ from provider to provider. If you have told the bank that the consumer loan is to be used for home improvement, they will probably not be satisfied if you go on holiday for the money. Online companies usually do not ask for the purpose, so here you have complete freedom over your consumer loan.

Claim – What does claim mean?

Claim - What does claim mean?

Most Danes know about the concepts of debt and receivables, and claims are actually a synonym for the same. It’s just that you owe money to a creditor.

Principal – What does principal mean?


The principal is the amount of money you are applying for. If you apply for DKK 100,000, the principal amount will be on this amount, depending on whether the formation costs are deducted or added. For the same reason, the amount available will always be different. That is why you may find that you have applied for DKK 100,000, but only receive it. 99.200 in the account. This can be because a start-up fee of DKK 800 has been deducted. In short, loan amount and principal are two concepts that cover the same.

Cash Credit – What Does Cash Credit Mean?

Cash Credit - What Does Cash Credit Mean?

The overdraft facility is an opportunity to raise a certain amount in the bank, up to an agreed amount of eg. DKK 20,000 or DKK 30,000 This is a good alternative to loans, as you only pay interest on the amount you have deducted. In this way, it is a smart contribution to everyday life and the periods when you are pressured purely financially. You decide for yourself how distinct you want to use the opportunity, but the less you raise or the shorter the time, the fewer interest costs you will get. There is no doubt that an overdraft can be a very good option, in certain situations.

Creditor – What does the creditor mean?

Creditor - What does the creditor mean?

A creditor is a legal entity that benefits money from a person or business. If your good friend owes you DKK 2,000, you are your creditor. Typically, various companies are creditors, while the individual consumer is the debtor. It is the creditor who can send you to the RKI or Debtor Register if you do not pay your bills and do not respond to their reminders.

Maturity – What does maturity mean?


The maturity is the period you choose to have the money. Online you can choose between maturities of 5 days to 180 months. The longer you have the money, the more expensive it will be for you, in the form of more interest costs. You should therefore always choose the shortest possible maturity without ending up with a monthly service that charges your personal finances.

Monthly Performance – What Does Monthly Performance Mean?

Monthly Performance - What Does Monthly Performance Mean?

The monthly benefit is the amount you have to pay to the lender. The benefit includes the installment, interest, and contribution if it is a mortgage loan. That is, the total amount you have to pay while the deduction is the sum that your debt is written down with.

It is very important that you choose a monthly benefit that is below your disposable amount and where unforeseen expenses have been taken into account. If you do not, you can sit in the scissors, where each penny must be turned to get the budget to vote.

Start-up fee – What does startup fee mean?

Start-up fee - What does startup fee mean?

The start-up fee is the price you pay to get the loan established and established. In the banking sector you can see the same name as the entry fee. Both cover the same. That the lender takes a price to arrange all the practical & administrative paperwork before you can get the money paid.

RKI – What does RKI mean?

RKI - What does RKI mean?

RKI is a term for Danes who have neglected their payment obligations. These are called popular for bad payers and it is something that limits your options as a consumer significantly. You cannot normally subscribe for new subscriptions or borrow money. In Denmark, we have two registers of bad payers, called Experian and the Debtor Register. At the same time, the homepage has come, where you can check yourself as a private person if you are in doubt whether you are registered.

If you are the RKI register, it is a good idea to know which creditor (s) have notified you and contact them to find an installment solution. That is the only way out of your debt situation.

APR – What does APR mean?

APR - What does APR mean?

APR is a percentage that shows the loan’s annual costs. The exact definition is Annual Percentage Cost (APR) and has become mandatory in Denmark to help Danish consumers. This makes it significantly easier to compare companies and assess who is the cheapest. Something that has previously been very difficult in the loan industry. For the same reason, you should have extra focus on ÅOP when comparing and selecting the best offer for you.

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