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*Calculation example: Total credit amount DKK 250,000. Term 11 years. APR 7.45%. Variable debtor rate 7.00%. Establishment DKK 2,500. Total repayment DKK 362,736. Term 1-15 years. Interest rate range 0.00-24.24%.

Loan Denmark

Whether you’re looking to buy a home, a car, or need a personal loan, understanding the requirements, types of loans available, interest rates, and application procedures is crucial. Our guide is designed to provide the essential information needed to make informed decisions and successfully find the correct loan in Denmark for you.

requirements to get a loan in denmark

Requirements for getting a loan in Denmark

To be eligible for a loan in Denmark as a foreigner, there are specific criteria and documentation requirements that must be met:

  • Residency Status: Proof of legal residency in Denmark is essential. This typically means having a valid residence permit or visa.
  • Employment and Income: Lenders require proof of stable employment and income. This often includes employment contracts and recent pay slips.
  • Credit History: A good credit history in Denmark is crucial. If you’re new to the country, some banks might consider credit reports from your home country.
  • Age Requirement: Most Danish banks require borrowers to be at least 18 years old. Age limits for certain loan types may vary.
  • Bank Account: Having a Danish bank account is often necessary for loan transactions.
  • Identification: Valid identification, such as a passport and Danish CPR (personal identification) number, is required.

Understanding these prerequisites is the first step in securing a loan in Denmark. Each lender may have additional specific requirements, so it’s advisable to consult with the bank or financial institution directly for detailed information.

How to Apply for a Loan in Denmark

Securing a loan in Denmark as a foreigner involves a clear understanding of the application process and meeting specific requirements set by Danish lenders. The process, while straightforward, requires careful preparation and attention to detail to ensure a successful application. From choosing the right lender to understanding the terms of your loan, each step is crucial in navigating the Danish loan system effectively. 

Here’s a detailed guide to help you through each stage of the loan application process:

  1. Research Lenders: Start by researching various banks and financial institutions in Denmark. Compare their loan products, interest rates, and terms.
  2. Prepare Documentation: Gather all necessary documents, including your ID, residence permit, proof of income (such as payslips), employment contract, and any relevant financial statements.
  3. Credit Assessment: Be prepared for a credit assessment. Lenders will evaluate your financial stability, income, debts, and credit history in Denmark or from your home country.
  4. Choose the Right Loan Type: Decide on the type of loan that suits your needs (e.g., housing, car, consumer). Each type has different requirements and terms.
  5. Online Application or In-Person Visit: Some lenders allow online applications, while others may require you to visit a branch in person. Complete the application form with accurate and up-to-date information.
  6. Loan Approval Process: Once you submit your application, the bank will review it. This process can take from a few days to a few weeks.
  7. Understand the Terms: If approved, carefully review the loan agreement. Pay special attention to the interest rate, repayment schedule, and any fees or penalties.
  8. Signing the Agreement: If you agree with the terms, sign the loan agreement. The loan amount will then be disbursed to your Danish bank account.
How to apply for a loan in denmark

Types of Loans Available in Denmark

Denmark offers a variety of loan types to cater to different financial needs. As a foreigner, understanding these options can help you choose the one that best suits your circumstances.

Housing Loans (Boliglån)

For purchasing property. These loans are typically long-term and come with various options like fixed or variable interest rates.

Car Loans (Bilån)

Specifically designed for buying vehicles. These can be secured (against the car) or unsecured, with varying interest rates based on the loan term and your creditworthiness.

Consumer Loans (Forbrugslån)

Unsecured loans for personal use, such as buying appliances or funding a wedding. They usually have higher interest rates due to the lack of collateral.

Credit Card

Credit cards provide a revolving line of credit with a set limit, useful for short-term borrowing and everyday expenses.

Debt Consolidation Loans

Aimed at combining multiple debts into a single loan, potentially with a lower interest rate, to simplify repayments.

Quick Loans (Kviklån) and Payday Loans

Short-term loans with high-interest rates, ideal for immediate cash needs but should be approached with caution due to the high costs involved.

Secured Loans

Require collateral, such as property or a vehicle. They usually have lower interest rates compared to unsecured loans.

Unsecured Loans

Do not require collateral but generally come with higher interest rates and stringent credit requirements.

What determines the price of a loan in Denmark?

When evaluating a loan in Denmark, several key factors contribute to its overall cost. Understanding these components is vital for borrowers to grasp the full financial implications of a loan. These factors not only determine the monthly payments but also the total amount repaid over the life of the loan.

For a loan amount of 40,000 DKK with an annual percentage rate (ÅOP) of 6.5%, an interest rate of 5.5%, over a period of 7 years, and an establishment fee of 500 DKK, the loan details are as follows:

Loan Amount (DKK)40,000
Annual Interest Rate5.5%
Annual Percentage Rate (ÅOP)6.5%
Loan Period (Years)7
Establishment Fee (DKK)500
Monthly Payment (DKK)574.80
Total Cost of Loan (DKK)48,783.34

Loan Amount (Principal)

The initial sum borrowed. A higher principal leads to higher repayment amounts.

Interest Rate

This is the cost of borrowing money, usually expressed as an annual percentage. The 5.5% interest rate in our example directly impacts the monthly payments and the total interest paid over the loan’s life.

Annual Percentage Rate (ÅOP)

ÅOP includes the interest rate and any additional fees or costs associated with the loan. It provides a more comprehensive view of the loan’s cost.

Loan Term (Duration)

The length of time over which the loan is repaid. Longer terms typically result in lower monthly payments but increase the total interest paid.


Additional charges like the establishment fee in our example. These are added to the total cost of the loan.

Repayment Schedule

Determines how often payments are made (e.g., monthly). This influences how quickly interest accumulates and, consequently, the total cost of the loan.

Type of Loan

Whether the loan is secured or unsecured can affect the interest rate and terms offered.

How much can you loan in Denmark?

In Denmark, the amount you can borrow, especially through personal loans, varies significantly, typically ranging from 1,000 DKK to 500,000 DKK. This range is designed to accommodate a wide array of financial needs, from small, short-term requirements to larger, long-term investments. However, it’s important to note that not everyone will qualify for the maximum amount, as this is determined by several factors like income, credit history, and the lender’s policies.

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*Calculation example: Total credit amount DKK 250,000. Term 11 years. APR 7.45%. Variable debtor rate 7.00%. Establishment DKK 2,500. Total repayment DKK 362,736. Term 1-15 years. Interest rate range 0.00-24.24%.

Legislation Impacting Loan Amounts and Rates

A pivotal change occurred in July 2020, when Danish legislation introduced a cap on the Annual Percentage Rates (ÅOP). This law mandates that the ÅOP cannot exceed 35%. This regulation aims to protect consumers from excessively high interest rates and ensures more transparent and fair lending practices. It’s a critical factor to consider when applying for a loan, as it affects the overall cost and might influence the maximum amount lenders are willing to offer.

Factors Influencing How Much You Can Borrow

  • Income and Financial Stability: Your income level is a primary consideration. A stable, higher income may qualify you for a larger loan.
  • Debt-to-Income Ratio: This measures your existing debts against your income. A lower ratio often enables you to borrow more, indicating that you can comfortably manage additional repayments.
  • Credit Score and History: A strong credit history in Denmark increases your chances of being approved for a higher loan amount, as it suggests responsible financial behavior.
  • Loan Type and Terms: The type of loan (secured or unsecured) and its terms, including the repayment period, also play a role in determining the loan amount.
  • Lender’s Criteria: Each bank or financial institution has its unique lending criteria, which can influence the maximum amount they are prepared to lend.

Importance of Responsible Borrowing

When considering how much to borrow, balancing what you qualify for with what you can realistically repay is crucial. The introduction of a maximum ÅOP of 35% is a safeguard against unmanageable loan costs, but borrowers should still undertake a thorough assessment of their financial situation. This includes evaluating your budget, future income stability, and long-term financial goals to avoid over-indebtedness and ensure that any loan taken aligns with your financial health.


Frequently Asked Questions

In Denmark, you can find a range of loan types including housing loans for property purchases, car loans for vehicle financing, consumer loans for personal expenses, credit card loans for revolving credit, and mortgages for foreigners, among others. Each type is designed to suit specific financial needs and situations.

In Denmark, personal loans typically range from 1,000 DKK to 500,000 DKK. However, the amount you can borrow depends on factors like your income, credit history, and the lender’s policies.

Yes, it’s possible to get a loan in Denmark. Both residents and foreigners can apply, but foreigners will need to meet specific criteria, such as having a valid residence permit, stable income, and a good credit history in Denmark or their home country.

Yes, Denmark has a credit scoring system. Credit scores are used by lenders to evaluate the creditworthiness of borrowers. A good credit score in Denmark is essential for securing loans with favorable terms. If you are new to the country, some lenders might consider your credit history from your home country.

Yes, foreigners can get a mortgage in Denmark, but they must meet certain requirements. These include having a stable income, a good credit score, and typically, a valid residence permit. The process and eligibility might be more complex for foreigners compared to Danish citizens.