Loans

What is loan (lån)? A loan is a type of debt. Lån is the amount of money which borrower takes from lender which is to be paid back in regular or sometimes not even in regular installments. But the money is provided at a cost which is known as interest on the debt (Loan). Loans are of two types. Mortgage loans (Boliglån) and Unsecured loans (Lån uden sikkerhed). A Boliglån is a loan in which the borrower pledges some asset ( tangible goods) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. The secured debt also know as Boliglån is thus secured against the collateral. In case the borrower defaults, the creditor takes possession of the asset used as collateral and can sell it to recover the amount of debt due from the borrower. Another type of loan is unsecured loan (Lån uden sikkerhed), in this there’s no automatic link to any tangible property. In case of unsecured loan the creditor cannot take any of your possession to pay off your Lån if you default.Some examples of Lån uden sikkerhed are credit card debt, personal loans etc..