In 2013, Finland introduced special rules for sms loans that were intended to stifle the fast loan industry and reduce debt in the country, but this autumn it turned out that debt nonetheless increased. As we have written before, Sweden plans to introduce similar rules and this is something that has been criticized by the Law Society. Among other things, the advocacy community claims that blatant prohibitions aimed only at a certain type of credit do not necessarily reduce debt in Sweden and that it can make people turn to other actors that can be even more harmful. It is not at all impossible that this will be a reality, as this is exactly what has happened in the country of origin Finland.
Quick loans in their debt registers
The foundation explains that there were previously hundreds of quick loans in their debt registers, but the sums were not so great while there are fewer loans in the register today but that “the sums are so incredibly large that we will not be able to help many very soon “.
As a solution to this problem, the Finnish Ministry of Justice is now looking at whether it could also introduce an interest rate ceiling for the larger private loans, an interest rate ceiling of 30%, but the guarantee foundation is unsure if it will help because their biggest problem is about loans that have a lower interest rate than that and which has a long maturity.
The Swedish Law Society may be right
Obviously, the Law Society may be right in dissenting from the government’s investigation into stifling sms loans, it is not at all certain that it will improve the situation for the consumer or reduce debt. Those who really wanted to take out a sms loan will instead apply for another loan and many will probably take a bigger loan than they otherwise would have. And some of these will end up with even worse debts than they would if they had been able to take out a sms loan. Well, that was the way it looked before the sms loans came to Sweden when more people were indebted than today.
They will continue to hack the remaining fast-lenders
Although they are not the biggest problem, just as the media in Finland does. Yes, even though the Guarantee Foundation claims that the larger loans with lower interest rates and long maturities are their biggest problems, it explains with its headline that the fast loans are cracking more and prove that there are fast loans that have such high fees that the actual interest rate exceeds 100%. Of course, it is true that many fast-loan companies have found loopholes in the law that also contribute to debt, but as I said, it is despite the larger loans that is the biggest problem in Finland today.