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
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?
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?
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.