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Large loans a growing problem in Finland

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

Quick loans

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

money loans

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.

Reduced interest rates for quick loans and sms loans

Now came the closure, the interest rate ceiling and the new rules for fast loans and other high-cost credits.

And as a result of a magic trick, the lenders lowered interest rates for their quick loans, sms loans, and account credits while other brands were closed down, but replaced by other brands. Thus, in practice, not a single lender has disappeared from the fast-loan market, not so far anyway.

Lenders lowered interest rates for their quick loans

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We at Good Finance have struggled hard to update our site since last Thursday (30 August 2018). During our work on the updates, we have seen what the industry will look like from now on and are happy to share this info with you.

We will first show you which brands have disappeared so you do not need to look for them again unnecessarily, and partly show you which lowered the interest rate for their quick loans.

But let’s start by giving you a little analysis of how these changes will affect you who want to borrow money and look at whether fast loans have become more expensive or cheaper.

How have fast loans changed?

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Most fast lenders today have chosen to offer account loans instead of sms loans. But apart from the fact that their loans are, by definition, now online loans, they are in practice still typical fast loans.

Payouts are just as fast, most take no UC, many accept remarks and apply an individual income assessment.

The only thing that really differs is that you get a certain amount of credit with a flexible repayment period instead of a fixed maturity (lenders who have chosen this model today can be found on our account credit page). This means that:

  • You can pay back what you have used at your own pace.
  • You do not have to pay any interest for the amount you have not used.
  • You can remove everything at once or in portions.
  • You can withdraw the money you have repaid as long as you do not exceed your credit limit.
  • If your credit rating is good enough, you can raise your credit limit whenever you want, unless you already have maximum credit.

There are also some lenders who, in addition to their account loans, offer fast loans with a fixed term and these are Fast Credit and Good Finance. Lenders who have changed their interest rates significantly and have chosen to only invest in sms loans and fast loans.

Have quick loans become cheaper?

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Yes, overall, fast loans have become cheaper but not always. The larger loans have clearly become cheaper than before, especially if you repay it for an extended period of time. The changes are thus excellent for those who want to borrow a little more and a little longer.

On the other hand, the smaller loans, perhaps USD 2000 – 5000 which have received new fees, are not always cheaper. In some cases, they have even become more expensive, although it is a truth with modification. Obviously, they will be expensive to maybe borrow USD 5000 and pay a setup fee, but that fee is only a one-off fee, so the next time you take advantage of your credit and pick out USD 5000 you pay no such fee. Then it will not be as expensive at all.

Thus, there are both advantages and disadvantages to having the fast loans have a lower nominal interest rate.

The advantages are:

  • If you want to take a slightly larger fast loan and pay back on it for a longer period, maybe 1 year, it is much cheaper today than before the interest rate ceiling was introduced.
  • Once you have opened your account credit and paid the setup fee, it will also be much cheaper than before to pick out a smaller amount of money.

The disadvantages are:

  • Most lenders introduce fees that they did not have in the past which sometimes make the smaller loans more expensive, at least for those who only want to use your credit on a single occasion.
  • Many lenders have raised their lowest loan amounts, which means that some may borrow more than they otherwise would and it becomes more expensive.
  • Because some loans have longer maturities and there are credits with a flexible repayment, many borrowers will probably pay off their fast loans for even longer than they would have done if the maturities were shorter.

We at Good Finance will go a little further on a deeper analysis of how the changes have affected the industry and you as a borrower.

Small credit immediately without Credit bureau.

A growing number of people in Germany have an entry with Credit bureau and are thus initially excluded from normal credit. Even a harmless cell phone contract can fail due to such an entry. Many people are therefore looking for a serious small loan immediately without Credit bureau.

Consequences of a Credit bureau registration:

Consequences of a Credit bureau registration:

Even if the existing debt has been paid off in full, the entry remains with Credit bureau for three years – a fact that actually amounts to a criminal record and is therefore always controversial. However, the political will to change this does not seem to exist. With a Credit bureau entry, it is not possible to obtain a credit in Germany, to overdraw the account or to use a credit card.

Small credit immediately without Credit bureau: the solution

Small credit immediately without Credit bureau: the solution

The Internet has led to a large number of online financial institutions that are not based in Germany and are therefore not subject to the strict local regulations on lending. Domestic institutes have also recognized the problem and now maintain online societies, which are basically only there to serve an audience that should be rejected at the counter. In a networked world, it may be time to think about the meaning of our Credit bureau if it is possible to legally circumvent the laws anyway.

The conditions:

The conditions:

A consumer loan from an online bank is usually a little more expensive than a conventional installment loan, but much cheaper than an overdraft facility. A copy of an employment contract and salary receipts from the past three to six months are usually sufficient to obtain the desired loan quickly and without red tape. The repayment procedures are similar to that of a “normal” bank.
Many online providers cooperate with local branch banks, so that classic personal advice is also possible.

Will the interest rate ceiling further reduce the excess debt?

This happened at about the same time as Good Finance presented new statistics that showed that fewer and fewer people have debts with Good Finance. The enthusiasm for the future is thus great even though there are some clouds of concern in the sky, which you can read more about further down this page.

It’s no wonder Good Finance thinks it’s a good thing to do with an interest rate ceiling because they assume that this will reduce the excess indebtedness and that fewer quick-blue cases will end up with them.

But the question is whether it will really get so much better. Sure, it makes sense with an interest rate ceiling and a cost ceiling, but it is not at all certain that this will lead to a reduction in over-indebtedness and that fewer loan cases will end up at Good Finance.

Risk of the opposite effect

Risk of the opposite effect

In a previous blog post, we explained that an interest rate cap does not necessarily have to lower borrowing costs, nor is it certain that it will reduce the excess debt. What can happen if an interest rate cap is introduced is:

  • Lenders who offer sms loans with a few months maturity start to offer annual loans instead, ie loans that have a maturity of one or more years.
  • These lenders will probably set their interest rates right at the interest rate ceiling, around 40%. Okay, it is very possible that several lenders will offer an interest rate of around 30% since there are already quite a few fast loans with a maturity of 1 year and up that have such an interest rate, they certainly want to compete with these.
  • Some lenders will also raise their loan amounts so that they continue to make a good profit.
  • This will mean that the final loan cost will not always be lower than it is today, partly because the maturity will be longer, and partly because more Swedes will borrow more than they otherwise might have done.
  • Many of those who cannot pay for their loans will generally have a greater debt than they otherwise would have, which can exacerbate the excess indebtedness due to sms loans.

Interest rate ceilings exacerbated indebtedness in Finland

Interest rate ceilings exacerbated indebtedness in Finland

We have on a number of occasions written a bit about Finland to try to come to a conclusion about how things will go in Sweden after the interest rate ceiling is introduced. Finland introduced an interest rate cap in 2013 for loans of max 2000 dollars, but apparently it has not improved the situation with regard to over-indebtedness.

On YLE’s (the Finnish equivalent of Sweden’s SVT) website on January 10, 2018, we were met by the headline “Debt-owed debt is getting bigger”. We know that we have written about Finns’ debt problems in the past, just as YLE has done time and time again, but it is worth repeating since the interest rate ceiling five years after it was introduced has not improved the situation in Finland at all. Here is how you can summarize YLE’s article :

  • Debt has increased year by year among the over-indebted, according to the Guarantee Foundation, which is trying to help them.
  • Among those who called the Guarantee Foundation’s support phone, the average debt was 6,000 dollars (about USD 60,000) greater than five years ago. Today, the average debt is almost 29,000 dollars. This is a bit interesting because the average debt was much lower before the interest rate ceiling was introduced five years ago, which is, of course, terrible for those affected.
  • Five years ago, those who took too many quick loans quickly had payment difficulties, but the total debt was smaller and easier to get rid of.
  • Today, when Finland’s fast loans become larger because of the interest rate ceiling, more people are taking large fast loans. This means that many who are unable to pay back their loans often have a much higher debt than people had 5 years ago.

Yes, what can you conclude from this? Probably the Swedish interest rate ceiling will also not be a miracle cure for indebtedness due to sms loans. On the other hand, a very small part of the total debt of Good Finance consists of sms debt, about 0.16% more precisely.

Good and bad news from Good Finance

Good and bad news from Good Finance

Yesterday (18 Jan 2018) Good Finance presented new statistics regarding debts at Good Finance which is also relevant to this article. This is what these statistics look like in brief:

  • The number of people who have a debt with Good Finance has decreased. In 2017, the number of indebted persons was 417,693, which was the lowest number since 1991. In 2016 there were 423,184 and in 2015 it was 427,734. This is a reduction of just over 10,000 people over two years. The reason is considered debt restructuring and a good Swedish economy. That was the good news.
  • The total debt amount at Good Finance has increased from just over USD 72,390,000,000 (in 2016) to approximately USD 78,732,000,000 (2017). It is thus more than USD 6 billion in a single year, but of course, it does not have much to do with sms loans, but it is mainly the mortgages and debts to the state that are the biggest culprits. This is bad news. Another bad news is that 100,000 people got their first debt registered with the bailiff last year, but so more people got rid of their debts as the number of people dropped.

We at Good Credit can draw a certain conclusion from these statistics. It is not the small loans that are the biggest problem in this country, if that were not the case, the number of people with cases at Good Finance would not be the lowest in 26 years since sms loans did not come to Sweden until 2006. In such cases, the number of people with Good Finance has been the lowest since type 2005, not since 1991, but the situation at Good Finance was actually worse in the years just before the sms loans came to Sweden.

Thus, it is the big loans (and liabilities to the state) that are the biggest problem, and what will it look like when today’s small sms loans are converted into larger fast loans with effective interest rates of 30 – 40% that are repaid over several years? Maybe the situation will get worse instead of improving. Let’s hope it doesn’t.

Compare installment loan and finance at top interest rate

 

 

With the right installment loan, your dreams will come true. Whether you need a small loan or would like to take out a larger loan amount: Modern installment loans are very flexible, quickly available and also score with the loan interest.

As an online loan, he knows how to convince with attractive terms and a quick loan approval. Some banks even allow installment loans with annual interest rates that are independent of creditworthiness.

But the choice is huge, never before have so many banks offered loans. Therefore, borrowing should not be done without prior comparison. On this page we explain what financing options are available and what is important when comparing interest rates. Our loan calculator is a powerful tool to help you find a loan with a low borrowing rate.

Why installment loans are a good decision

Why installment loans are a good decision

There are still numerous consumers who finance car purchases, holidays and many other expenses with their overdraft facility. As a result, they accept extremely high lending rates. It would almost always be better to use an online loan. We have explained the decisive advantages for the applicant below.

  • Low loan interest

    The interest rate difference is huge with the borrowing rate. It is not uncommon to reduce interest costs by more than half compared to the overdraft facility. This results in a large saving, which can amount to a few hundred dollars for medium loan amounts.

  • Safe repayment

    It is not that easy to balance the current account’s negative balance. The mere resolution often does not lead to the goal. If, on the other hand, monthly installments are to be paid, a constant and therefore targeted repayment of the remaining debt is certain. The rate can be set so that the debt rescheduling is effortless.

  • Easy to apply

    The credit market has changed a lot, the direct banks have literally turned it upside down. Never before has a loan application been made so quickly. The loan can be applied for within a few minutes and applicants often find out immediately whether it is possible to finance it. The loan agreement comes about quickly and the loan amount is paid out quickly.

This is how the installment loan works

This is how the installment loan works

After the loan has been approved, the bank initiates the payment. The entire loan amount is paid in one payment to the borrower’s account. It usually only takes one to two working days from approval to receipt of money in the account.

With most loans, repayment begins around the middle or end of the next month. However, there are also installment loans that allow a later start of repayment. The repayment is made in monthly loan installments, which always amount to the same amount. Almost every loan agreement is designed in such a way that the term is always designed for whole years, ie depending on the selected loan duration, for example, 12, 24 or 36 monthly installments are to be paid.

Loan options in detail

Loan options in detail

Some financial institutions do not only offer a classic installment loan with free use. Some special loans are now also available. Here is an overview of the financing options.

Credit for free use

The classic installment loan that does not have a purpose limitation. The borrower decides on the use of the loan amount and is not accountable to anyone. The most common funding purposes are:

  • Education (advanced training, study)
  • Health (cosmetic surgery, dentures, etc.)
  • Furniture
  • Consumer electronics
  • vacation

Car loan

The majority of all new vehicles are financed today. Due to the high demand, banks have often developed additional installment loans to finance vehicles. They have a fixed purpose and are optimally tailored to the needs of car buyers. Because the car has a corresponding countervalue and thus forms good security, even better conditions sometimes lure. The repayment will be made in full, at the end of the term there will be no residual debt thanks to the continuous repayment.

Rescheduling credit

Make debt restructuring and achieve an interest advantage thanks to lower annual interest rates. Expensive loans are replaced by cheap financing in order to reduce interest costs. Likewise, several existing loans can be redeemed and combined into a new loan, which results in a better overview. Here we have gathered detailed information about the debt restructuring.

Small loan

At most banks, installment loans are only available from a loan amount of around 2,000 to 2,500 dollars. Some institutes issue small loans that are already starting. 1,000 dollars are available. The interest can be credit-dependent and credit-independent. Even here, a credit comparison is recommended because it promises to save.

Installment loan comparison

Do the interest rate comparison. You determine the loan amount and term, we calculate the interest for your installment loan from many loan offers.

How good is bank’s credit card?

Bank Good Finance’s credit card is a card that is completely exempt from annual fees, gives you up to 45 days interest-free credit and has a credit limit of max USD 100,000.

It also benefits you who often fly with Norwegian because its Cashpoints can be converted into air travel and it is excellent, but how good is the card really? Is it really the perfect credit card for the trip abroad? And is it right for you? You will soon know that for now, we at Across Lender will show you everything that is worth knowing about the Norwegian card.

Credit card info

bank

  • Credit limit: Up to USD 100,000.
  • Interest-free credit: Up to 45 days.
  • Effective example interest rate on deferred payment after the interest-free period: 21.93% at USD 15,000 for 12 months.
  • Annual fee: 0 USD.
  • Purchase of goods in Sweden and abroad: USD 0.
  • Withdrawals at ATMs in Sweden and abroad: USD 0 (but keep in mind that there are ATMs abroad that charge a fee regardless of what you have too short).
  • Withdrawals from a Swedish or foreign bank: USD 0 (but for such withdrawals, interest rates start ticking, as do everyone else: picking up money from the ATM).
  • Fee for paper invoice: USD 45.
  • Currency surcharge for use of the card abroad: 1.75%.

Yes, this looked really good until we reached the final point. It is perfect with cards that have no annual fee and that have no fees when using the card, but it is not perfect with a currency surcharge of 1.75%. In practice, this means that you pay 1.75% on all your purchases and withdrawals abroad.

It is certainly not uncommon for currency surcharges (there are many cards that have both currency surcharges and fees when used abroad), but it is still a bit of a shame because it would have been the perfect card otherwise.

A 1.75% currency surcharge means that you pay USD 17.50 for every thousand dollars you spend abroad. It is certainly not an astronomical amount of money and given that the card has an interest-free credit for up to 45 days and no annual fees and withdrawal fees, it is quite okay anyway. After all, it won’t cost you more than USD 175 if you spend USD 10,000 during a trip.

Late fees

If you do not pay your invoice on time, you will have to pay a delay fee of USD 95 plus a penalty interest rate of 24%, and if you receive a reminder, you will pay USD 60 more in the reminder fee, but this is what most credit cards look like.

Credit card interest rates and withdrawal limits

Credit card interest rates and withdrawal limits

The credit card has an interest-free credit of 45 days, which in practice means that if you pay for everything you have used when you receive your invoice, you will not pay a single cent in interest. Otherwise, the effective interest rate is 21.93%.

The card has a withdrawal limit of USD 10000 / day for withdrawals abroad and 5000 USD / day for withdrawals in Sweden, but of course, you can shop with the card as much as you want as long as you stay within your credit limit.

And last but not least about the card’s cashpoints

money

Like all other sensible credit cards, Norwegian has a bonus system where you get a lot of points when you use the card. Here’s how Bank Good Finance Cashpoints work:

  • Each cash point corresponds to a Norwegian USD, which at the time of writing (July 2017) is almost as much as a Swedish USD.
  • If you buy a flex ticket at Norwegian, you get 10% of the ticket price in cashpoints. If the tickets cost a total of USD 5,000, this means that you will receive 500 cash points, ie a value of USD 500 that you can use when buying new tickets.
  • If you buy Low fare tickets you get 4% in points, which will be 250 cash points if you trade for USD 5000.
  • Each time you use the card in-store you get 0.5% in cash points on merchandise purchases up to USD 100,000.

For example, if you have 1000 cashpoints and buy a ticket for 2000 USD, you only have to pay 1000 USD from your own pocket and use your points to pay the rest.

Pros & cons of the card

Now we will make a brief summary of Bank Good Finance’ cards by looking at the card’s advantages and disadvantages.

Benefits

  • Interest-free credit for up to 45 days.
  • High credit limit of USD 100,000 (if your credit rating is good enough).
  • No annual fee.
  • No withdrawal fees.
  • Generous bonus system that benefits you who often fly with Norwegian.

Drawbacks

  • Currency surcharge of 1.75% when using the card abroad.
  • The effective interest rate is quite high (currently 21.93%) after the interest-free period.
  • Bank Norwegian charges a fee of USD 45 for each paper invoice they send out.
  • Norwegian’s bonus system only benefits you who fly with Norwegian because the points can only be used for air travel purchases.
  • You must be at least 23 years old to receive this card.

Credit for civil servants.

Civil servants enjoy a high reputation in society. After all, they have what everyone wants: a permanent, permanent and crisis-proof job. No official ever has to worry about his job, because once you have achieved official status, you can only get rid of it if you are at fault.

For this reason, civil servants are considered to be particularly creditworthy and financially predictable. A permanent job is the most important prerequisite for granting a loan – but with employees in the free economy, the job can be gone overnight. This is completely different for civil servants: long-term and future-oriented planning is possible thanks to secure income.

Loan for civil servants – what are the special features?

Loan for civil servants - what are the special features?

If you work as a civil servant and want to take out a loan, you have a very good chance. Many banks offer a special loan for civil servants, which is characterized by advantageous terms and low interest rates. Since you have a job that cannot be canceled, the banks will accommodate you more and offer you cheap loan offers. Of course it is also important that you have a “clean” Credit bureau and that you can pay the repayment installments despite the monthly expenses. If these conditions are met, there is nothing standing in the way of the loan for civil servants.

Which bank is the best?

Which bank is the best?

As already mentioned, many banks offer loans to civil servants. But of course there are big differences between the individual banks. Online banks are usually more advantageous than “normal” branch banks, which is reflected in the interest rates as well as in the other conditions. If you are looking for the right provider, you should make a comparison on the Internet.

As a result, you can find out which banks are suitable for you and which offers are particularly cheap within a few seconds. If you wish, you can also submit the loan applications online – quickly, easily and without obligation.

Debt restructuring despite poor creditworthiness

With debt restructuring despite poor creditworthiness, all consumers have the chance not to unnecessarily strain their creditworthiness and to worsen it even further. Loans that are too expensive always lead to problems and can be associated with the result that debt is too high if the monthly installments are too high or a necessary deferral is refused.

Debt rescheduling on a cheaper loan gives the free financial market the opportunity to make use of debt rescheduling despite poor creditworthiness, thereby ensuring better contractual terms and a lower interest rate. So that the discount on debt restructuring is not only convincing at first glance, but also in terms of duration, a comparison before deciding on an offer is optimal and opens the view to a loan with tailored options.

Simply carry out a debt restructuring despite poor creditworthiness

Simply carry out a debt restructuring despite poor creditworthiness

The credit bureau Score often deteriorates further during the loan term, as installments cannot be paid or the full amount can be instructed to enter into a contract. With a flexible loan, this problem would be eliminated and there would always be a chance to opt for a temporary deferral or permanent reduction in the installment amount, as well as for an earlier repayment of the total amount without additional costs. It is therefore highly recommended to look for an offer like this when rescheduling despite poor creditworthiness and not to opt for a loan that stands out solely due to its low interest rates.

The low interest rate can be seen as an attractive side effect, but cannot be selected as the sole criterion for an advantageous loan. Private lenders and foreign banks are lenders where debt restructuring is possible despite poor creditworthiness and the granting of loans is not based on the credit bureau Score and creditworthiness in general.

Since you do not have to introduce yourself to the lender at a personal appointment and therefore have to accept a longer and expensive trip, offers from abroad are also an option, which often responds with particularly flexible contractual terms and ensures a very cheap and advantageous loan , The application is made online and must contain all the important data about the borrower himself, as well as the possible protection, and must be filled in according to the truth and supported by plausibility.

Favorable conditions for debt restructuring despite poor creditworthiness on the free financial market

Favorable conditions for debt restructuring despite poor creditworthiness on the free financial market

In most cases, alternative investors are cheaper in terms of interest rates than is known from the house bank or state credit institutions. But the real advantage lies in the framework conditions, which can be adapted to any unforeseen situation in the life of the borrower due to free changes in the term. If you have to spend hours or lower rates, want to repay the loan earlier than planned and not live with an increase in price, the flexible contractual terms will be helpful and well chosen.

With regard to unpredictable events in the term, it is advisable to opt for a very flexible loan without fees for a change in the repayment and to select the debt rescheduling despite poor creditworthiness and according to your own criteria. Not all loans are suitable for every applicant and can therefore be selected by comparing them without making a wrong decision and without unnecessary restrictions.

The online application is another advantage that applicants receive on the free financial market and is a sign of the unbureaucratic processing. As soon as the application has been filled with the important data about the borrower and sent to the recipient via the Internet, the recipient will process it and notify it of its approval. Once this has been done, the borrower does not have to wait long for the money and can have the sum after a short time. There are also various options for the loan amount, which means that you can reschedule the financing for your home just as much as a car loan or a comparatively small consumer loan.

If the creditworthiness precludes a loan application from the house bank, consumers do not have to forego the desired debt restructuring and can opt for debt rescheduling from foreign banks or donors on a private basis despite poor creditworthiness. Transparency is necessary and protects against wrong decisions, which make the loan more expensive and can lead to financial bottlenecks during the term. In the protection you can access details outside of the credit rating and the loan with real assets or via a surety, as well as a second applicant can be easily approved.

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