Below you will find a guide to the fees and charges you can expect when you borrow money.
As a borrower, it is important to remember to take into account that you must not only repay the amount of money you originally borrowed from your provider, but also have to pay fees in addition.
The amount that you have borrowed is called the loan proceeds. The loan proceeds, including the fee for establishing the loan and the so-called capital loss together, are called the principal . This indicates the actual size of the loan amount that you ultimately have to repay.
The amount that constitutes the principal is most familiar with before, but many forget to take into account all the fees and charges associated with borrowing. However, it is important to familiarize yourself with these as they can significantly increase the amount you have to repay.
These charges vary depending on the type of loan you have taken. Therefore, it is important that you, as a borrower, always familiarize yourself with the costs associated with the loan you are considering taking. That way, you are prepared for and familiar with what your loan will actually cost you.
We have here collected the most common fees and charges you can face when borrowing. In this way, you know what costs you should be aware of in connection with your loan.
The interest amount must also be repaid
Interest is generally a fee, which is a percentage of the amount you have borrowed. This interest amount must be repaid to your lender, and thus comes in addition to the principal as you mentioned also repay.
An interest rate is usually calculated on an annual basis or another period or quarter that is set. Therefore, you will find that the price of your loan increases in stages during your loan period. In addition to this annual interest rate, you also need to know: Interest rates, effective interest rates, nominal interest rates and variable and fixed interest rates.
Interest rate interest is important in this context.
Renter’s interest refers to the fact that the same amount repays several times. So an interest rate on the interest rate. If you have a loan where you have to pay the interest rate, you have to pay interest on your loan amount and interest on the interest until you start paying off your loan.
Fee on loan formation
For certain loans, you must pay a founding fee, which, as the name indicates, is a fee for setting up a loan. This fee is also sometimes referred to as a foundation fee or establishment fee.
Some loan providers will charge you a set up fee. Other loan providers allow the formation fee to increase depending on the amount of money you borrow. In addition, the fee may also constitute a percentage of your loan amount.
On the small loans, this fee will often be relatively low. On the larger loans that are settled on a percentage of the loan amount, you can advantageously examine what the different providers can offer you, which you can investigate right here .
The foundation fee is usually about 2% of your entire loan, but may vary. Most often, the foundation fee covers the stamp duty to the state, registration of your documents and handling fees. The foundation fee is thus linked to the fact that your loan provider must pay some expenses as they are imposed by the state.
However, it can also be a fixed percentage of the loan that you must pay to start with as a private borrower. This is especially true for home loans.
Fee for managing your loan
In connection with most loans, you have to pay fees for managing the loan including billing and payment.
Most loan providers charge a payment fee of approx. DKK 25 and a billing fee of approx. DKK 33 The payment fee is most often dependent on the form of payment. If this happens, for example. via payment service or via payment card.
These fees may seem small and irrelevant, but there are still extra costs that increase your borrowing costs.
Smoking letters also cost you extra
If you do not want to pay your monthly installment in time, you will not forget that you receive a reminder letter.
Loan providers usually send up to 3 reminder letters. According to the Interest Act, these are subject to the rule that they must never cost more than DKK 100. After the 3 reminder letters you are forwarded to Debt collection, where a fee of DKK 100 is usually also involved.
Remember! That you always have the opportunity to change your payment plan if you for a period of time experience that you cannot pay your monthly installment. You just contact your loan provider here to help you. Keep in mind that your provider is always interested in the loan being repaid and therefore is usually willing to change your plan.
Fees if you opt for insurance for your loan
When you borrow, you can choose to add a security insurance to your loan, but be aware that this is not free. You have to pay a fixed percentage of your monthly loan service.
Such a security insurance covers your payments if you, for example, should get out of losing your job or the like and therefore unable to pay for themselves.
This insurance fee depends on your loan provider, but will often be approx. 8% of the monthly payment.
Of course you only have to pay this fee if you have actually chosen insurance for your loan.
When you take out a mortgage loan
This fee is related to the admission of a so-called mortgage loan from a bank or mortgage bank. There is also a fee to be paid here.
Here, the fee is a standard amount that is determined by the individual bank or mortgage bank. This fee may be between DKK 2,000 and DKK 4,000 depending on the provider. However, in some cases the fee can be negotiated.
The fee that a customer pays to a bank when trading in bonds or shares. Ie the costs a bank has when selling the bonds that have borrowed. The bank charges a fee to convey this transaction and it is the one called brokerage.
The contract value amounts to 0.25% of the value of the bonds (up to DKK 3 million). It then falls to 0.20% of their total value.
The fee differs from provider to provider, so here is good reason to investigate and compare prices.
Most often, the characteristic of housing trading is that the mortgage loan is registered. After that, the loan is legally binding, which helps to secure your rights when purchasing your property.
The registration tax thus refers to everything that has to do with this land registration service.
The mortgage bank and the bank usually charge a fee that depends on what you are interested in enrolling.
If mortgage deeds are already registered, when you make a home purchase, you can actually save money if you take over this property registration. Then you only have to pay tax if you want to increase the amount of the registration of the mortgage deed.
Remember that fees can vary and be negotiated
The majority of the above-mentioned fees and charges on loans you will experience no matter which bank you borrow from. However, they can vary in size.
In addition, you will find that when you go to the bank, in some cases, these fees and charges can be negotiated in size. Including especially when they apply to your loan’s interest.
Always make as many offers as possible from as many banks as possible. This way, you know what the different loan providers have to offer you. You can compare all your options that best suit your needs and your finances by clicking here .