Please note that this information only applies to Lunar in Denmark.
At Lunar, you can apply for a credit line of 10,000 DKK. With a credit line, you get more flexibility in your finances and security if unexpected situations arise.
What does it cost?
The interest for the credit line is either 8%, 12%, or 20% and it is determined based on an individual assessment. Your interest is deducted on the last day of each month.
You only pay interest on the amount withdrawn on the credit line. If the credit is not used, no interest is paid. There is no monthly fee for having the credit available.
Here is an example:
The total credit amount is 10,000 DKK, and the variable interest rate is 20% (can vary from 8%-20%). If the credit is fully utilized and repaid as a standing loan with a term of 5 years, the total credit costs, i.e., interest & fees, amount to 10,000 DKK, resulting in a total repayment amount of 20,000 DKK. APR is 20%.
There is a 14-day right of withdrawal on credit agreements.
Applying for a Credit Line
You can apply for an overdraft facility directly in the Lunar app. Here you simply follow the flow - and then we will get back to you as soon as possible. Normally, there is a response within 24 hours.
If approved, your credit line of 10,000 DKK will be available immediately.
How do you calculate the interest?
When you use the overdraft facility, the interest is calculated daily and credited on the last day of the month.
Example: The total amount of credit is DKK 10,000 and the interest rate is 20%.
If the credit is not used: no interest is charged.
If the credit is utilized 100% and settled as a loan with a term of 5 years: The total credit costs amount to DKK 10,000, which is a total repayment amount of DKK 20,000. The APR is 20%.
Assumptions:
1) The credit is taken out after an interest accrual date
2) The accrued interest is paid immediately and all months are of equal length.
You can always use the calculator in the app to see how much you will have to pay in different scenarios.
Cancellation of overdraft facility
There is no lock-in period, so you can cancel your overdraft facility whenever you want. However, the maximum term is 5 years. If you want a credit line longer than that, you simply need to apply again.
To cancel your credit line, the full amount must be repaid. You cancel and repay the credit line at the same time. This is done in the Lunar app under "Discover" - "Credit line" - "Cancel". This requires that the balance at "Credit used" is 0.