JURIDICA INTERNATIONAL 22/2014
University of Oslo
Instant Loans to Consumers*2
This article deals with the Norwegian legal framework concerning non-secured ‘instant’ loans to consum-
ers. The loans are ‘instant’ because the procedure of applying for and granting them is meant to be fast and
uncomplicated, often so as to make the money available the same day as the loan is applied for, or just a few
days later. There is no requirement of a mortgage, surety, or other security right. The loan is not granted
for a speciﬁ c purpose. The business idea is obviously to offer access to cash rather informally and on short
notice; the term ‘easy loan’ is often used in advertising on the Internet. In Norwegian, such loans are often
called forbrukslån, literally ‘loans for consumption’.
Non-secured instant loans to consumers are offered by several actors in Norway. The most important
lenders seem to be banks, providing loans either directly or through intermediaries. Those offering credit
services to Norwegian customers (whether banks, other ﬁ nancial institutions, or even businesses estab-
lished abroad) are subject to public licence and supervision requirements (see Section 2). In practice, there
are likely to be few cases of credit granted to consumers living in Norway by institutions not established
in Norway and not offering their services here (the consumer thus having actively contacted the lender
abroad); no statistical information is available, however.
Advertising indicates that the following example is representative.*3 The consumer may borrow
between NOK 5,000 and NOK 400,000 (EUR 625–50,000). The effective annual percentage rate (APR)
varies between 9.59 and 21.24 per cent and the initial rate depends on the borrower’s ‘ﬁ nancial situation’.
The amortisation period is, at maximum, 15 years. The borrower may repay the loan at any time at no extra
cost, as the interest rate is variable. The borrower must be a Norwegian citizen, have an income, and have
no active debt collection actions against him.
There is one provider of even smaller instant loans, Folkia AS.*4 For such loans the relative costs are
higher; a loan of NOK 1000 (EUR 125) for one month, for example, has a staggering APR of 9242 per cent,
due not least to NOK 350 (EUR 44) of set-up charges. Folkia AS is a rather small actor in the Norwegian
credit market but the business concept has naturally drawn some public attention.
Alternatives to the loans described above are overdraft facilities and credit cards, both of which are
rather common. Credit costs are regularly quite high for these alternatives as well.
1 The author would like to thank Katherine Llorca for her text editing.
2 The research leading to these results has received funding from the Norway Financial Mechanism 2009–2014 under project
contract No. EMP205.
3 From Bank Norwegian AS (www.banknorwegian.no, most recently accessed on 7 February 2014). For other examples, see
DnB (www.dnb.no, most recently accessed on 7 February 2014); Santander Consumer Bank (www.santander.no, most
recently accessed on 7.22014); GE Money Bank Norge (www.gemoney.no, most recently accessed on 7.2.2014).
4 See folkia.no (most recently accessed on 7.2.2014).