|
Finnish
Bank Loans
Housing Loans in Finland
Finnish
Credit Cards
Interest Rates on Credit Cards & Loans
Additional
Information
Finnish Bank
Loans
As in any developed country, your chances of getting a loan in Finland depend on your employment status, income, how much you want to borrow, your residence status, your credit rating and history, and your guarantor(s) if available.
Contact the banks directly for an interview/application.
Some tips from expats in Finland are:
- try as many banks as you can and see
what they offer - the differences in base rates
and margins can be substantial
- the banks have specialists who will also explain tax issues - they will tell you which documents the
tax authority requires
- make sure ALL documents are translated into
English, not just the ones the bank suggests are appropriate
Finnish Housing Loans ( source: www.ara.fi )
A personal housing loan from a bank can typically cover some 70% of the price of the dwelling, with the rest being paid in cash. It is possible to finance up to 85% of the cost through a personal loan by using a state guarantee (see below).
The banks are by far the main source of personal housing loans. Personal loans are typically tied either to 6- or 12-month Euribor interest rates or to prime rates set by the banks, with a fixed margin varying from about 0.8 to 1.6 percentage points depending on the housing market, the bank and the customer. The State subsidises personal housing loans through tax relief on mortgage interest. The typical amortisation period for personal housing loans increased during the 1990s and stands today at approximately 20 years.
State subsidies for the finance of owner-occupied housing production
The State currently supports owner-occupied housing production through an interest subsidy system for the construction of single family houses and an interest subsidy loan for multi-family housing.
In addition, the State guarantee for owner-occupied housing loans can be used when constructing a single family house, while tax relief on mortgage interest is available as well.
State interest subsidy based on social need can be granted to a housing loan for the construction of a single-family house.
Return to top
Finnish Credit
Cards
A recent immigrant to Finland will usually find it
difficult to get credit until they have established
a significant bank account and a history of steady employment.
Experiences with applications for a credit card appear
to vary widely between banks, end even between branches
of the same bank.
Essentially, if you have been in Finland long enough
to establish a satisfactory credit rating and you have
a regular income, you should have no trouble getting
a credit card. But, how do you get a credit history
when they won't give you a loan or credit card without
one? The regular income aspect goes a long way to making
you a viable risk, and long-term residency doesn't hurt
either. However, a huge sum of money in the bank will
NOT necessarily warrant approval for credit. All you
can do is ask.
If you are self-employed, chances are you don't have
a regular income. When applying for a card you will
be asked to provide your company's profit/loss statements
for recent years - if these look promising you will
once again be in good stead to be approved. However,
it may be that you are self-employed and have only been
resident in Finland for a relatively short time!
One option, if you absolutely require a credit card
and have the requisite funding, is to pay a security
deposit to the bank. The deposit will be three times
the amount of the credit limit for which you are applying,
and will be held by the bank for a period of three years.
If you pay your bills on time for that period the bank
apparently then considers you a safe bet, and will return
your deposit.
Return to top
Interest Rates on Loans & Credit Cards
Average interest rates on loans by Finnish monetary financial institutions to euro area households since 2003:
- excluding overdrafts and credit cards: 3 - 4%
- including overdrafts and credit cards: 5 - 6.5%%
For housing loans the average rate has been 3.5 - 3.8% since mid-2003.
Comprehensive interest rate statistics on loans, deposits, housing loans, student loans and more are available at the Finnish Central Bank (Suomen Pankki) Web site.
*Use the Search box in the top right hand corner, or the Site map
Return to top |
