All there is to know

Do not compare mortgages and business loans

Comparing mortgages and business loans is easily misleading. When you take out a mortgage, the housing stands as collateral for the loan. A home has a relatively constant value and is easy to resell if you cannot pay for the loan. The risk of the lender losing the money it has lent out is therefore low, which means that the interest rate can be kept low. Business lending is more complex and requires the lender to do more thorough analysis. There aren't always collateral either, and when it is, their value and marketability are not as straightforward as they are for homes. Business loans are therefore riskier for the lender which is why the interest rate is higher than it is for mortgages. This is true for any lender, whether it is a major bank, a niche player or a state organization.

‍

Interest is set based on your business's performance and sales

Your sales, history and other information come into play when the interest rate for your business loan is determined.

‍

The business loan market is not regulated

This means that companies that issue loans can set their interest rates freely, without always taking into account what is best for you. It also means that important information can be hidden in the fine print, which can lead to unexpected high costs if you do not read your agreement carefully. At Froda, you never have to worry about this as we have no hidden fees or set-up fees. In addition, the effective interest rate is also clearly expressed.

‍

Pay extra attention to the effective interest rate

This shows the total cost of the loan, including all fees. If the effective interest rate is not shown, it can be a warning signal.

‍

At Froda you always have a lowest price guarantee

This is to make sure you get the best deal. If you manage to find a better price elsewhere within 30 days from when you got your Froda offer with equal terms, we will match it.

‍