Securing a Loan As a 20-Year-Old

securing a loan

Although consumer loans are easy to get, they still require a set of criteria before they can be given out. Some of these include the creditworthiness of the borrower which includes their income and expenses as well as factors such as age and if they pay tax.

When a consumer loan is to be given, age and income are usually a limiting factor for younger people. The borrower is usually required to have a fixed income. They may also be required to have housing as a form of security. In addition to these, the typical lower limit for a borrower’s annual income is expected to be between 120,000Kr and 200,000Kr. It’s simply the higher your income, the greater your chances of granting you a loan.

An average 20-year-old is not likely to be able to meet these requirements. They are likely still in school or just finishing school and the likelihood of having this amount of income is very low. Fortunately, some banks have an exception to these requirements.

A variety of factors will determine whether you as a 20-year-old will get a loan or not. A borrower must at least be of the legal age limit of 18 years before they can apply. Most Norwegian banks have higher age limits up to 25 years.

What To Do As a 20 Year Old to Get a Loan

Except you can prove that you have a solid income coupled with a good history of payment, you are not likely to get a loan. So what do you do in this situation as someone who is between 18 and 20 years old? Below are a few tips on what to do.

Do Not Be Hasty

When anyone is seeking a loan and especially if you are young, you must not make hasty decisions. Take your time to understand what is required and which banks may be favorable to you. You should know that the fact that a particular bank says the age limit is 23 years does not mean that your application will automatically be rejected.

It will most likely still be given consideration. You may be young and still earn enough to qualify for the loan. In fact, the banks will desire to have you as a customer if this is the case.

Part of not being hasty is to take your time and look for a loan with the lowest rates possible. Even if the first offer you come across seems low, you should not rush. This is because banks offer different interest rates. By doing this, you will be able to compare the various loans and get one that has the lowest interest rates than others.

Submit Lots of Application

In continuation of the point above, when seeking a loan as a 20-year-old, you should apply for as many as possible. Granted that you will be rejected in some quarters but it is not a smart idea to stay with one or a few lenders. There are many others. Whatever kind of loan you desire, it is always good to have different options to choose from. You can do this by applying to as many banks as possible. Doing this increases your chances of getting the cheapest rates.

Use Loan Agents

Applying to as many banks as possible can be time-consuming and tedious but you need to do so. Rather than do so by yourself, you can use a loan agent or broker so that it becomes quite easy. Agents are people or companies that work with different banks and collect offers on your behalf. The only thing you have to do is provide your details and fill out a single application.

There are many benefits to using an agent. For one, they work in tandem with many banks which in some cases may be up to 15 to 20 lenders.

Secondly, their services are free. The Norwegian Financial Contracts Act says that agents cannot request payments from a loan applicant. So how do the agents get paid you may ask? They often receive commissions from the lenders.

Thirdly, when you apply through an agent, you will begin to receive offers in your email within 24 hours. You can compare to see which one will be most favorable for you. Even when you get an offer, it is non-binding. Offers typically last for 30 days.

Fourthly, using an agent helps you save time as well as effort you would have used to apply to each bank. You can also get advice and tips from them if you need help.

Finally, some agents accept applications from people who are 20 years of age so you can find such to help you out with your application.

When applying through agents, avoid using multiple leading ones. The banks they represent will receive more than one application from you. Also bear in mind that after the loan agreement has been signed, agents have nothing to do with it again. You have to relate with the bank directly.

How Banks Determine Your Eligibility for A Loan

Virtually all lenders have minimum requirements before they can grant a loan. As mentioned previously, these include age, income, payment history and nationality.

While most have upper age limits of 23 and above, the age is meant to serve as a guideline and not a rule that is cast in stone. If you are 17 years and below, your application will be rejected immediately. As long as you are 18 years and above, you will still get a look in even if their stated age limit is higher.

The major reason for setting the age limit is because generally young people have low incomes. There is a risk that they may not be able to pay back the installment and the interest. There is also the possibility of receiving payment remarks which will be a negative dent on the individual. If a young person has a good income despite their age and has good payment history, then the age limit requirement can be waived.

The only conditions in which an application will immediately be rejected is if the applicant is

  • Less than 18 years old.
  • Not Norwegian or not living in Norway. You may not be Norwegian but you must have lived at least 3 years in the country to qualify.
  • Does not have a fixed income. This is flexible and can be based on how much you intend to borrow
  • Has payment remarks. For some banks, you also cannot have debt collection cases that are active.

Credit Assessment

If you pass this first stage of sorting, then the next critical stage is your credit assessment. At this stage, your age does not matter as much but it still does in a way. It is one of the factors that is used in calculating your credit score. The younger a person is, the lower the score. Thankfully, there are other factors used asides from age. You should ensure that your financial behavior is “good” as this helps you to improve your score as you grow older. You will also have more opportunities to get cheaper interest rates in the future.

The assessment is typically based on information that is publicly available including from banks, debt registers, tax authorities and many more. It is a measure of how much risk is involved in granting you a loan. It impacts your chances as well as the interest rates you get. In other words, it shows the bank how much you can borrow and the conditions that should be attached to that. You can learn more about it here.


Whilst most banks will usually require a high age limit to give out loans, it is not cast in stone. As a 20-year-old, you can still qualify to get one if you have a good income and a great history of payments. It is important to apply to as many banks as possible and do not be in haste while doing. In addition to this, do all you can to ensure that your credit score is high by ensuring to pay back promptly.

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