For many years, the unofficial maximum limit for a private loan was $ 300,000 or $ 350,000. The large commercial banks are still at these levels. It is obvious that a private loan cannot be the same amount as, for example, a mortgage loan. The reason is that the lender only has its ability to pay, so to speak, to provide as collateral for the loan.
Recently, however, the maximum amounts have been raised. In 2014 and 2015, several banks and credit companies began offering private loans of up to $ 400,000. Just a few years later, a number of players introduced private loans of $ 500,000 and during the autumn and winter of 2017/2018, some lenders raised their maximum amounts further. It is now possible, in case the own economy allows it, to borrow up to $ 600,000 without collateral and in some cases it is also possible to borrow without UC.
More people need to borrow for cash
A natural question is why the maximum amounts tend to be gradually increased. An underlying reason is the general price trend. Wages are increasing and everything is becoming a little more expensive.
Another reason is the low interest rates. The correlation between the Riksbank’s repo rate and the interest rate on a private loan is not entirely clear, but there is a link.
However, the most important reason for the increase in the maximum amount for private loans is, however, that the demand for blank loans to pay for the cash contribution for housing is increasing. The introduction of tougher mortgage loan regulations in recent years has meant that anyone who buys a home must go in with large sums of their own money. Anyone who does not have a number of hundreds of thousands of dollars saved may then have to take out a loan to pay the cash contribution. Whether it is a good idea or not is another question.
Many players are gradually increasing the maximum amount
Astro Bank was one of the fastest lenders to start raising its maximum amounts a couple of years ago. Today, the bank is one of the players offering just $ 600,000 as the maximum loan amount.
Another lender that has recently made significant changes to its offerings is Lendify. Over a night, the maximum loan amount was increased by $ 150,000 from $ 350,000 to $ 500,000.
The fact that the ceiling is constantly being moved upwards is natural, partly because of a greater demand for loans for cash. However, the higher the ceiling, the less room there is for further increases. Probably just 600,000 $ is a kind of pain limit. With a higher amount than this, the lender takes a very large risk in its lending.
Loan brokers are following the trend
A loan broker is an actor who negotiates loan offers from a number of business partners. In this way, it is natural that any change in the offer of the respective partners will be reflected in the loan broker’s selection.
Astro Bank is a good example of a lender who has collaborations with many loan intermediaries. Since the maximum amount to borrow from Astro Bank is $ 600,000, the maximum amount of the loan intermediaries linked to the bank is also the same amount. Some examples of loan brokers that have followed the trend are Litelend Finance and MoneyRite. Most mortgage lenders will probably raise their maximum amounts in the coming months. There is fierce competition among private loan intermediaries and no operator can afford not to keep up with the flow,