A mortgage or a combination of loans?

A mortgage or a combination of loans?

There are many different terms used for consumer credit, loans and different types of financing. It may be difficult for the consumer to understand what a loan is, even if they are familiar with different options. To help you understand these differences, we will now go over the differences between a structured loan and a consolidation loan, its purpose, and who it suits.

A consolidation loan, that is, a combination of loans, is typically an ordinary consumer credit

A consolidation loan, that is, a combination of loans, is typically an ordinary consumer credit

A consolidation loan is a standard consumer loan designed to combine several smaller loans into one larger one. The aim is to reduce loan repayments and loan management costs. The problem is that an over-indebted person may apply for such a loan, default on their past debts, and use the money for another purpose. Thus, even if the ability to manage your own finances is completely lacking, you can obtain a consolidation loan.

If the debtor has a lot of self-discipline and really uses the loan to pay off past debts, a consolidation loan can be a good option. However, the lack of control is a major challenge.

Who can apply for a consolidation loan?


Any person meeting the minimum eligibility criteria for consumer credit can apply for a loan combination. The granting criteria vary depending on the financial company and must always be verified directly with the lender. Typically, a loan of EUR 10,000 to 20,000 is applied for.

Features of the consolidation loan

Purpose: Combining multiple loans into one, everyday purchases

Loan amounts: EUR 5,000-60,000 , exceptionally more

Interest rates: Nominal interest rates are about 5-20 percent

Collateral: Not required, but you can also apply for a collateralized mortgage loan from a bank.

Repayment period: 2-15 years

A structured loan, or loan arrangement, is a good way to get your economy in order

A structured loan, or loan arrangement, is a good way to get your economy in order

A mortgage loan is often a viable way to get your money back under control. Often, a person applying for a mortgage loan has several expensive loans. He may also have tried to balance his economy by taking out a consolidation loan like the one described above. Over time, a person may have realized that their ability to pay is inadequate and that they are unable to repay their debts.

The background may be carefree indebtedness, but more typically life has come as surprises for which the economic buffer was not enough. This is approaching the situation where the loan payments are due – or at least threatened to become due. Unpaid loans eventually end up in debt collection and collection.

Unlike a consolidation loan, a structured loan aims at a genuine change in the consumer’s finances. Therefore, when applying for a structured loan, the applicant’s situation is thoroughly examined and the causes of indebtedness are also addressed – a loan always requires a commitment to change. For this reason, the collateral loan is also granted only for the amount of the debts to be paid, so that no additional indebtedness will arise.

The process of applying for a restructuring loan


The applicant for the arrangement loan will go through its financial situation with the handler. After that, the client fills in an application describing their life situation and the reasons for indebtedness. During the application process, the client will discuss with the expert whether the arrangement loan could be a good way to get their finances back into control.

A mortgage loan is rarely available alone, but often requires a joint and several loan applicant – sometimes up to two. Solidary applicants are responsible for paying the loan should the applicant fail to comply with the loan repayment plan. This ensures that the loan is paid off and does not go into debt collection and collection even if the borrower’s life situation becomes worse during the loan period.

An arrangement loan can also be obtained in a situation where there are no solidarity applicants, but the applicant has assets that can be used as collateral.

As a service, the purpose of the arrangement loan is therefore to take into account the applicant’s overall situation and break the debt cycle.

Commitment and the desire to get your own finances in order play an important role in applying for a restructuring loan. Previously, a restructuring loan has been applied for from a bank and the guarantee has been provided by the Guarantee Fund. Due to high demand, Svea Ekonomi also offers loan facilities nowadays.

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