Loan Words and Their Meaning – Explanation of Loan Terms



If you need to take out a loan, there are a number of concepts that are good to keep track of before you jump out of the loan process. The market can sometimes seem unmanageable and here a knowledge of concepts can help you well on the way.

We have looked at a number of the most widespread and relevant loan words that you should know as a consumer. Read about them here.


credit Amount


credit Amount

The total amount of credit is the amount you end up getting paid. So it is the money you borrow, less all the formation costs. The foundation typically costs around 500 – 800 kroner.



The period you have to repay your loan back is called maturity. The maturity depends on the size of the loan you take. Mostly, there is a short maturity on small loan amounts and a longer maturity of larger amounts. It is different from the provider to the provider, how long a term you can get.

On the web, it can fluctuate between 15 days to 180 months, depending on who you choose. You therefore have a wide range of options as a customer.


Construction fee


Construction fee


The creation fee is a lump sum you pay when the loan is created. The creation fee varies from provider to provider.

As you can see in our overview, it can fluctuate from 495 to 800 kroner, depending on who you apply with.


Credit costs

credit costs


Credit costs are what you pay to be able to borrow your money. Credit costs are the same as APR, but calculated in kroner and cent instead of percentage. The amount you have to pay back is both the credit amount and the credit cost.





APR stands for Annual Percentage Costs. All banks and loan providers must inform ÅOP when they offer financial products, and therefore it is easy to keep an eye on. The annual cost involves both interest, fees, formation costs and all the other small amounts it costs you to take the loan. Find the loan with the lowest APR to find the cheapest solution.


The borrowing rate


The borrowing rate


The borrowing rate is the annual effective interest rate. It’s the interest rate you pay, plus the interest rate on interest. It is a guide for all the different companies’ websites.


Credit rating


credit rating


A credit rating is something that the loan provider or bank makes to make sure you can repay your money again. Part of the credit rating is to ensure that your name is not registered with RKI, which is a register of bad payers in Denmark. If you have your name registered, it is not possible to apply. In addition, pay slips, annual statements and budgets are used to find out if you can take a loan.

In principle, the bank is much more detailed in their credit rating, while the online providers make fewer questions and “just” must have documented the stated income.

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