Sometimes you just don’t have quite enough money to buy what you want to buy. Whether you’re looking for a new car or a different place to live, most people can’t afford everything they want to buy on the spot.
This is where banks finally come in to help out the public with their huge coffers ready to lend you the money you need to continue the endless cycle of capitalism. The USA is generally considered the best in the world for money lending, so how do their consumer loans compare to those here in Norway?
The King of Lending?
A lot of modern financial and economic theory has found its basis in the systems the USA adopts, making it the gold standard for any sort of financial comparison. With a decent enough credit rating it is easy for any US citizen to get hold of their mortgage or auto loan, but the ease of acquisition doesn’t mean that they always provide the beste forbrukslån.
Hey Big Lender
As of September 2021, the banks in the USA currently hold $1.6trillion of consumer loans, making it the highest lender on the planet. This is great for the consumers as it shows the liquidity of the economy and the willingness for banks to give out money.
Meanwhile, in Norway, banks have been trying their best to help consumers with solid personal loans. Due to the COVID-19 pandemic, the public’s willingness to borrow has severely dropped.
Saving Vs Borrowing
With people keeping money in their savings and lacking the ability to pay back loans, bank profits dropped significantly over the last couple of years. This is an issue that hasn’t hit the USA with their strong capitalist ideals and very short national lockdowns.
The low amount of regulation in the US economy means that there are a lot of big banks offering predatory loans to consumers, which can end up harming consumer and bank alike. Regardless, they continue to push their luck week on week, bringing fear to financial analysts of another impending economic collapse.
Norway, however, is part of the European Economic Area (EEA), meaning that it can take part in the EU single market and its citizens benefit from some limited EU regulation. As a result, their consumer loans are a lot more muted and designed to benefit both the customer and the financial institutions they wish to borrow from.
Ease of Access
This brings a huge amount of stability to the whole system and ensures a level of safety for anyone wanting to borrow money. Unfortunately the downside is that it can make it far more difficult for certain people to borrow money, even if they know they can support the repayments.
This is a system designed to protect the banks as well as to ensure that anyone who is borrowing money can definitely pay it back. It does take away a lot of the choice present in the USA, but it is a good trade-off, ensuring that most people can get hold of an approved loan while protecting the more vulnerable citizens of Norway.
One big way that the Norway beats the USA is with loan overpayment. In the USA it is extremely common to find long-term loans (especially auto loans) which often end up with the consumer paying at least double the worth of the product.
This is a result how easy it is to access financial aid in the USA but it isn’t great for the consumer. Norway, however, has an extremely low rate of overpayment, meaning that your loan is far more cost-effective. This slows the growth of banks, but has also been shown to slow the rate of increasing poverty in a nation – a fine trade if you ask me!