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Loan example: *The loan term can be 1-20 years, the loan amount is €1,000–€70,000 and the interest rate is 4–20%. Example: When the loan amount is €15,000, the interest rate is 6%, the repayment period is 8 years, the opening fee is €0 and the account management fee is €5/month, the monthly installment is €202, the amount to be repaid is €19,404 and the annual percentage rate is 6.89%. Please note that the loan can also be repaid faster.

Loan refinance in Finland involves replacing an existing debt obligation with a new loan that offers more favorable terms. Borrowers typically pursue this strategy to secure lower interest rates, reduce monthly payments, or modify the repayment timeline. The process is widely available through traditional Finnish banks, digital lenders, and specialized financial institutions. Refinancing applies to various forms of credit, including mortgage loans, consumer credit, and vehicle financing.

The Finnish financial market is highly regulated to ensure transparency and consumer protection. When you apply to refinance a loan, lenders must adhere to strict guidelines set by the Finnish Consumer Protection Act (Kuluttajansuojalaki). They are required to assess your solvency meticulously. This assessment relies heavily on data from credit information registers such as Suomen Asiakastieto and Bisnode Finland. Additionally, the introduction of the Positive Credit Register (Positiivinen luottotietorekisteri) has provided lenders with real-time data on an applicant’s income and existing debt load.

Successful refinancing requires a clean credit history and sufficient income to cover the new loan payments. If a borrower has a payment default entry (maksuhäiriömerkintä), obtaining a new loan to refinance old debt becomes significantly more difficult. In such cases, the debt may already be under the administration of the Finnish Enforcement Authority (Ulosottolaitos). Understanding the interaction between these entities and the banking sector is essential for anyone looking to restructure their finances in Finland.

Rates and Fees

The cost of refinancing a loan in Finland varies depending on the type of debt and the lender’s risk assessment. Interest rates for unsecured consumer loans are generally higher than those for secured loans like mortgages. The following table provides an overview of typical rates, fees, and terms associated with refinancing different loan types in Finland.

Loan Type	Typical Annual Interest Rate	Establishment Fee	Account Management Fee (Monthly)	Typical Approval Time
Unsecured Consumer Loan	4.5% – 19.5%	€0 – €150	€0 – €12.50	1 – 3 Business Days
Secured Mortgage Refinance	3.5% – 4.5% (Euribor + Margin)	€300 – €1,000	€2.50 – €5.00	1 – 3 Weeks
Secured Car Loan	4.0% – 8.0%	€100 – €300	€5 – €15	2 – 5 Business Days
Debt Consolidation Loan	5.0% – 15.0%	€0 – €150	€5 – €12.50	1 – 5 Business Days

Interest rates for consumer credit are capped by Finnish law. The maximum nominal interest rate for most consumer loans is 15% plus the reference rate, but it cannot exceed 20% in total. Lenders may also charge an establishment fee (avausmaksu) and a monthly account management fee (tilinhoitomaksu). However, the law limits these annual costs to a maximum of €150 per year.

When refinancing a mortgage, the costs are structured differently. The primary cost is the bank’s margin (marginaali) added to the reference rate, usually the 12-month Euribor. Refinancing a mortgage often involves administrative fees for drafting new loan documents and potentially costs related to transferring collateral. It is crucial to calculate the total cost of the new loan, including all fees, to ensure it offers genuine savings over the existing arrangement.

The Mechanics of Loan Refinancing

Refinancing is the act of taking out a new loan to pay off one or more outstanding debts. The legal structure of the debt changes, as does the contract. In Finland, this process is often referred to as “lainojen yhdistäminen” (combining loans) or “lainan kilpailuttaminen” (competing/tendering loans). The new lender pays the original creditors directly in many cases, or the funds are transferred to the borrower’s account with the instruction to clear the old debts immediately.

The primary mechanic involves the evaluation of risk. The new lender assumes the risk of the borrower. If the borrower’s financial situation has improved since the original loan was taken—for example, through a higher salary or a better credit score—the new lender may offer a lower interest rate. Conversely, if the market rates have dropped, refinancing allows the borrower to capitalize on the current economic environment.

Technically, the process relies on strong electronic identification. You cannot complete a loan refinance application in Finland without Finnish Bank IDs (verkkopankkitunnukset) or a Mobile Certificate (mobiilivarmenne). These digital keys allow the lender to verify your identity with absolute certainty and access your data from the population register and credit databases.

The Role of the Positive Credit Register

In 2024, Finland implemented the Positive Credit Register (Positiivinen luottotietorekisteri). This is a centralized database maintained by the Finnish Tax Administration (Verohallinto). It contains comprehensive information about the loans and income of private individuals. Before this register existed, lenders relied primarily on negative credit data—knowing only if a person had failed to pay bills.

Now, when you apply for a personal loan refinance in Finland, the lender is legally required to check this register. They can see exactly how much principal you owe to other financial institutions, the interest rates of your current loans, and your reported income. This prevents over-indebtedness.

For a borrower, this means that hiding existing debts is impossible. To successfully refinance, the calculations must show that the new loan is affordable based on the verified data in the register. If the register shows that your debt-to-income ratio is too high, the refinance application will likely be rejected, even if you have never missed a payment.

Credit Checks: Asiakastieto and Bisnode

While the Positive Credit Register handles loan amounts and income, traditional credit reference agencies like Suomen Asiakastieto Oy and Bisnode Finland Oy still play a critical role. These companies maintain records of payment defaults (maksuhäiriömerkintä). A payment default entry is generated when a debt remains unpaid for a prolonged period despite reminders and collection attempts.

A payment default entry is a significant barrier to refinancing. Most mainstream banks and online lenders have automated systems that reject applications immediately if a default entry is found. The entry indicates a high risk of insolvency.

However, recent legislative changes have softened the long-term impact of these entries. Previously, a default mark could remain on a record for years even after the debt was paid. Now, the payment default entry is removed from the credit register within one month of the lender reporting that the debt has been paid in full. This allows borrowers to rehabilitate their creditworthiness faster and eventually access refinancing options again.

Debt Consolidation as a Form of Refinance

One of the most common reasons to refinance in Finland is to consolidate multiple smaller debts. Consumers often accumulate debt through credit cards, installment accounts (osamaksu), and quick loans (pikavippi). These smaller debts often carry high interest rates and separate monthly fees.

A debt consolidation loan in Finland combines these liabilities into a single contract. The borrower takes out one larger loan to pay off all the smaller creditors. The goal is to secure a lower average interest rate and reduce the total monthly administrative fees. Instead of paying five different account management fees, the borrower pays only one.

This strategy simplifies personal finance management. It reduces the risk of accidentally missing a due date, which could lead to late fees or eventual collection actions. Lenders view consolidation favorably if it clearly improves the applicant’s disposable income by lowering the monthly debt service obligation.

Mortgage Refinancing in Finland

Refinancing a home loan differs significantly from unsecured consumer credit. In Finland, mortgage loans are typically tied to the Euribor reference rate plus a bank-specific margin. Refinancing a mortgage usually refers to renegotiating this margin or switching banks to get a lower margin.

The process involves requesting offers from multiple banks. The new bank will assess the value of the property and the borrower’s solvency. If the property value has increased, the loan-to-value ratio decreases, which might justify a lower margin.

There are costs associated with a mortgage refinance in Finland. The new bank may charge an arrangement fee. If the loan is moved to a new bank, the digital mortgage deeds (sähköiset panttikirjat) must be transferred. The borrower must weigh these one-off costs against the long-term interest savings. It is also important to note that if the current mortgage has a fixed interest rate, breaking the contract early may incur a compensation fee paid to the bank.

Refinancing Vehicle Loans

Car loans in Finland can be secured or unsecured. Secured car loans are often provided by the car dealership’s financing partner, with the vehicle serving as collateral. Unsecured car loans are personal loans used to purchase a vehicle.

Refinancing is possible for both types. A borrower might choose a car loan refinance in Finland if they initially accepted a high-interest dealership offer and later qualified for a cheaper bank loan. Alternatively, a borrower might refinance a balloon payment—a large final lump sum due at the end of a contract—into a new installment loan to continue paying off the vehicle over a longer period.

When refinancing a secured car loan, the ownership registration must be handled correctly. The new lender will require their name to be added to the notification part of the registration certificate at the Finnish Transport and Communications Agency (Traficom).

Business Loan Refinancing

Entrepreneurs and companies in Finland also utilize refinancing to manage cash flow. Business loans may be refinanced to extend the repayment term, thereby lowering monthly overheads, or to release collateral for other uses.

A business loan refinance in Finland typically requires a detailed analysis of the company’s financial statements. Lenders will review the balance sheet and profit and loss accounts. For smaller businesses and sole traders (toiminimi), the personal credit history of the entrepreneur is often checked alongside the business’s credit rating.

Finnish state-owned financing company Finnvera often provides guarantees for business loans. When refinancing, the status of any existing Finnvera guarantees must be clarified. The new lender will need to ensure that the guarantee can be transferred or that a new guarantee can be issued.

The Role of the Finnish Enforcement Authority (Ulosottolaitos)

If a borrower fails to refinance or pay their debts, the case may proceed to the Finnish Enforcement Authority (Ulosottolaitos). This government agency is responsible for collecting unpaid debts through enforcement measures. This can include garnishing wages, freezing bank accounts, or liquidating assets.

Refinancing is generally not possible once a debt is in active enforcement (ulosotto). Lenders view active enforcement cases as absolute disqualifiers. The goal of refinancing is to prevent the situation from reaching this stage.

However, there are specialized “social loans” (sosiaalinen luotto) granted by some municipalities in Finland. These are designed for low-income residents who cannot obtain credit from commercial banks to consolidate their debts and avoid or exit enforcement. This is a form of public sector refinancing distinct from the private market.

Consumer Protection and Interest Rate Caps

The Finnish Consumer Protection Act (Kuluttajansuojalaki) provides a safety net for borrowers. It sets strict limits on the costs of credit. As of the latest regulations, the interest rate on consumer loans cannot exceed 20%. This cap applies to all consumer credit, including credit cards and installment loans.

This regulation protects borrowers from predatory lending practices. When you refinance, the new loan contract must comply with these caps. If you are holding older loans taken out before September 2019 (when a strict 20% cap was introduced) or other regulatory shifts, these old loans might have significantly higher interest rates. Refinancing these old, expensive loans into a new loan under current regulations can result in immediate and substantial savings.

The Finnish Competition and Consumer Authority (KKV) monitors compliance with these laws. The Consumer Ombudsman supervises lenders to ensure marketing is truthful and terms are reasonable.

Supervision by the Financial Supervisory Authority (FIN-FSA)

All banks and financial institutions offering loans in Finland are supervised by the Financial Supervisory Authority (Finanssivalvonta or FIN-FSA). This entity ensures financial stability and confidence in the financial markets.

For a borrower, this supervision ensures that the institution offering a refinance loan is operating legally and maintains sufficient capital buffers. It also means that there are formal channels for complaints and dispute resolution. If a bank acts inappropriately during the refinancing process, the customer has recourse through the Finnish Financial Ombudsman Bureau (FINE).

Documentation Required for Refinancing

To successfully refinance a loan, applicants must provide documentation to verify their financial standing. Thanks to the digitization of Finnish society, much of this is retrieved automatically, but manual submission is sometimes required.

Commonly required documents include:

• Proof of Income: Recent pay slips (palkkalaskelma) or pension statements.
• Tax Return: The most recent pre-completed tax return (verotuspäätös) and the specification of tax assessment (verotustodistus).
• Debt Information: Statements showing the current balances and account numbers of the loans to be refinanced.
• Bank Statements: Three months of transactions from the main bank account to show spending habits.

Using a loan calculator before applying helps borrowers estimate the required loan amount and prepare the necessary figures.

Bank IDs and Strong Authentication

The entire refinancing ecosystem in Finland hinges on strong electronic identification. Finnish Bank IDs (verkkopankkitunnukset) are issued by banks like Nordea, OP, Danske Bank, S-Pankki, and others. These credentials serve as a digital signature.

When you sign a refinancing agreement online, you use your Bank IDs. This signature is legally binding, equivalent to a handwritten signature. It is impossible to complete the process anonymously or without these credentials. Foreigners residing in Finland must obtain these IDs from their local bank to access online loan markets.

Comparing Banks vs. Online Lenders

Borrowers in Finland have two main categories of lenders for refinancing: traditional brick-and-mortar banks and digital-only financial institutions.

Traditional Banks (e.g., OP, Nordea, Danske Bank):

• Often offer the lowest interest rates for premium customers.
• May require in-person meetings or phone negotiations.
• Prefer customers who move their entire banking relationship (daily accounts, insurance) to them.
• Stricter lending criteria regarding employment type and residence duration.

Digital Lenders and Neobanks (e.g., Morrow Bank, Alisa Pankki, Bank Norwegian):

• Operate entirely online.
• Faster processing times, often providing decisions within minutes.
• Specialized in unsecured consumer credit and refinancing.
• Slightly higher interest rates than premium bank offers, but often more flexible criteria.
• Do not require changing your main daily bank.

Loan Brokers (Lainankilpailuttaja)

A popular method for finding a refinance loan in Finland is using a loan broker service. These intermediaries do not lend money themselves. Instead, they send the applicant’s data to multiple banks and financial institutions simultaneously.

The borrower fills out one application. The broker forwards this to 20+ lenders. The lenders return their offers, and the broker presents them to the borrower. This allows the borrower to compare interest rates and terms easily. Services like Omalaina, Rahalaitos, and Sortter are prominent examples in the Finnish market. Using a broker is typically free for the consumer, as they earn a commission from the lender.

Risks of Refinancing

While refinancing is generally beneficial, there are risks involved. The most significant risk is extending the loan term excessively.

If a borrower refinances a €10,000 debt that had 2 years remaining into a new loan with a 10-year term, the monthly payment will drop drastically. However, the total interest paid over the life of the loan will likely be much higher, even if the interest rate is lower.

Borrowers must analyze the “Total Cost of Credit” (todellinen luottohinta) rather than just the monthly payment. It is easy to fall into a cycle of refinancing repeatedly to lower monthly payments, effectively keeping the borrower in debt indefinitely.

Early Repayment Regulations

Finnish law guarantees the right to repay a consumer loan early. If a borrower refinances a loan but then receives a windfall (e.g., a tax refund or bonus), they can pay off the new loan immediately.

For variable-rate loans (which most consumer loans are), there is usually no penalty for early repayment. The lender can only charge interest for the days the loan was active.

For fixed-rate loans, the lender may claim compensation for the loss of interest income, but this is strictly regulated and rarely applies to standard consumer credit in Finland. This flexibility makes refinancing a safe option, as the borrower is not locked into the new debt if their situation changes again.

Refinancing with a Co-Applicant

Adding a co-applicant (rinnakkaishakija) can significantly improve the chances of approval and result in a lower interest rate. A co-applicant is jointly and severally liable for the debt. This means if the primary borrower stops paying, the co-applicant is fully responsible for the entire balance.

Spouses or partners often refinance together. The combined income of two applicants lowers the risk for the lender. The Positive Credit Register will show the debt load of both individuals, so both must have clean credit records.

Impact of Employment Status

Employment status heavily influences refinancing offers. Permanent full-time employment (vakituinen työsuhde) is the gold standard. Lenders view this as a stable source of income.

Fixed-term contracts (määräaikainen työsuhde) are viewed with more caution. The loan term generally cannot exceed the duration of the employment contract significantly unless there is a strong history of contract renewals.

Entrepreneurs (yrittäjä) face stricter scrutiny. They often need to provide financial statements and tax decisions to prove their income stability, as their income can fluctuate more than that of a salaried employee.

Refinancing Student Loans

Student loans (opintolaina) in Finland are government-guaranteed and typically have very low interest rates and favorable repayment terms. Refinancing a student loan with a commercial consumer loan is almost never advisable. Commercial loans will invariably have higher interest rates than government-backed student loans.

However, student loans are considered debt in the Positive Credit Register. They affect the debt-to-income ratio when applying to refinance other debts. Lenders will calculate the monthly student loan payment as an expense when determining affordability for a new refinance loan.

The “Cooling Off” Period

Under the Consumer Protection Act, borrowers in Finland have a 14-day right of withdrawal (peruutusoikeus) for distance sales of financial services. If you sign a refinance contract online and then realize the terms are not what you expected, or you find a better offer, you can cancel the agreement within 14 days without penalty.

You must return the capital immediately, and you may have to pay interest for the days you held the money, but you cannot be charged other fees or penalties. This provides a safety buffer for consumers.

Refinancing and Tax Deductions

Historically, interest on some loans was tax-deductible in Finland. Currently, the tax deductibility of mortgage interest is being phased out completely. Interest on consumer loans and car loans is not tax-deductible.

When refinancing, it is important to understand that converting a loan type does not usually generate a tax benefit. If you refinance a rental property loan (investment loan), the interest remains deductible against rental income, provided the purpose of the loan remains the generation of income. Mixing personal debt with investment debt during refinancing can complicate tax reporting, so keeping these loans separate is advisable.

Handling “Balloon” Payments

Many car finance deals in Finland are structured with a “last installment” or balloon payment. This is a large lump sum due at the end of the contract. Many borrowers do not have the cash to pay this lump sum.

Refinancing is the standard solution here. The borrower takes out a new bank loan to pay the balloon payment and then pays off that new loan in standard monthly installments. This effectively extends the payment period for the car.

The Importance of “Todellinen Vuosikorko”

When comparing refinance offers, the most critical metric is the “Todellinen vuosikorko” (Real Annual Interest Rate / APR). This figure includes the nominal interest rate plus all other costs: establishment fees, invoicing fees, and monthly management fees.

Finnish lenders are legally required to display the APR prominently. A loan with a low nominal interest rate but high monthly fees might have a higher APR than a loan with a slightly higher rate but no fees. Refinancing is only successful if the APR of the new loan is lower than the APR of the existing debts.

Summary of the Refinance Process

The process begins with an audit of current debts. The borrower lists all outstanding balances, interest rates, and monthly fees. Next, the borrower uses comparison tools or contacts banks directly to request offers for the total amount needed.

Upon receiving offers, the borrower compares the APR and monthly payment. Once the best offer is selected, the borrower signs the agreement using Bank IDs. The lender then performs the final check against the Positive Credit Register and Asiakastieto. Upon approval, funds are disbursed. The borrower must then ensure that all old debts are paid off immediately to finalize the restructuring.