Compare loans

When comparing loans, pay particular attention to the interest rate and expenses. If they are too high for your ability to pay, the loan principal will decrease slowly. In some cases, the interests and expenses of a loan may add up to a higher amount than the original loan. In this case, you will use more money for paying the loan expenses than for repaying the actual loan.

Questions to consider

• What is the annual percentage rate of charge for the loan? The annual percentage rate of charge means the total costs of the loan per year. In addition to the interest rate, the annual percentage rate of charge also includes all other loan expenses and fees per year. The annual percentage rate of charge is a similar measure as the price per kilo when purchasing vegetables. It is always calculated according to the same formula.
  
  
• How much are the other loan expenses, such as loan establishment fees and account maintenance fees?
  
  
• How much will the loan really cost you during the entire loan repayment period?
  
  
• The total loan amount is the combined amount of the monthly repayments you will make during the entire loan repayment period. It is a good idea to compare the total loan amount to the original amount of the principal, in other words the amount that you will receive when you take out the loan.
  
  
• In what circumstances will the interest rate change? If the interest rate goes up or down, it will affect the amount of your monthly repayments.
  
  
• Can you pay off the loan at an accelerated pace? Read more about this on the website of the Finnish Competition and Consumer Authority.
  
  
• You should also find out whether it will be possible to take loan repayment holidays and how much they would cost. During a repayment holiday, you will only have to pay the interest on the loan, so the amount you need to pay is smaller, but the principal will not decline.

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