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Norwegians' total debts exceed 100 billion NOK


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writer icon Kristine Hanson     ISB   |   Culture     🕐 21. Jun. 2018


Norwegians now have debts of more than 100 billion NOK from consumer loans. This is due in part to the interest on loans, with interest rates being as high as 20-30%.

Last week, the Norwegian Financial Supervisory Authority published a report which showed that “[the] Norwegian households’ debt burden is high on average and, for a large proportion of households, very high.”

The report also showed that some of the banks are violating guidelines that exist to ensure proper lending practices.

The danger of loans

Hallgeir Kvadsheim is a presenter for the Norwegian TV show Luksusfellen, or Luxury Trap, a show about people who have issues with their economy and spend more money than their incomes permit. Kvadsheim seems concerned with the situation in Norway, telling NRK that the consumer loans are “a rather dangerous product”

Åsunn Lyngedal, a politician for Norway’s Labour Party, commented on the report, highlighting the fact that 35% of all consumer loans are given without following correct banking procedure. “It should not be that you can make people into debt victims with the way you run your business,” she said

No existing limit on interest

Norway has no limit on the amount of interest that can be applied to a loan. People are divided on this issue. Jorge Jensen of the Consumer Council told NRK of the extreme cases that exist where a short-term loan of a smaller amount of money can reach “up to almost 1000% effective interest”

Jensen wants to introduce a cap on interest rates. A max limit for interest would prevent loans becoming so expensive.

Siv Jensen, Norway’s finance minister, said to NRK that she would like to investigate the suggestion of a cap on interest rates. She does not believe that it is so simple, though. “A capped interest rate can have unintended effects”, she said.

Last Monday, 11 June 2018, a proposal for capped interest rates was made to the Norwegian Supreme Court by The Labour Party.  They want to hear what the government believe the maximum interest rate should be.

A Danish solution

In Denmark, a different approach has been taken to tackle the rising number of short-term loans with such high accompanying interest rates. Since 2017, there has been an obligatory cooling-off period when applying for a loan. This time for reflection, something the Danes call the 'think-pause' (tænkepause) is a mandatory 48 hours. 

The U.K.

One country where a limit on interest rates already exists is in the United Kingdom. In 2015, a cap on short-term loans was introduced, setting the maximum interest per day at 0.8%.

The total repayment of the loan, interest and all associated fees have also been capped at 100%. This means that a borrower will not be required to pay back more than double the amount they borrowed.


No debt register
Norway does not have an insolvency or debt register. Such a register could be used as an additional tool to see who is suitable or not suitable to take a loan.

The Norwegian government is now considering offers from private operators who could be commissioned to create such a register. The topic of a debt register is something that has been under investigation in Norway for many years.



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