Payday loans (referred to as “SMS-lån” in Sweden) are very popular in Scandinavia. Moreover, the number of people unable to pay these loans is highly increasing. Between the year 2011 and 2012, the number of individuals unable to repay their payday loans, which mostly involve higher interest rates, rose 62 %. In the area, one in five people is unable to repay their payday loans. But surprisingly, the number of SMS loan lenders is also highly increasing.
Why many Scandinavians are considering payday loans
There are various reasons why the popularity of payday loans is highly increasing in Scandinavia – especially in Sweden and Finland. There are very many situations which require instant cash. What’s more, the advantages of SMS loans outweigh their drawbacks. For example, a person looking for money to finance his/her car repair bill, or a person in need of unexpected traveling is more likely to go for the payday loans. Some of the reasons why people go for these loans include:
– Easier application processes
– The loans have no involved credit checks
– The lenders do not charge any upfront fees before approving the loans
– The lenders process the loans within a shorter period
– After receiving the money, the borrower can use it in any way he/she wants.
As a matter of fact, payday loans are a better way of solving short-term financial problems. Payday loan lenders are also everywhere, and what’s more, you only need a phone or a computer to access the loan. And if there are no lenders in your area, you can quickly look for one on the internet. There are some good services out there, one in particular that we found; http://smslån123.se, who compare SMS loans and lenders up against each other.
Problems related to payday loans in Scandinavia
Before going for a payday loan, you have to consider both the benefits and the related problems. One trick related to the SMS loans is timely payment. Even though you can choose to extend or renew your payday loan, you will still incur additional charges if you are unable to repay on a timely basis. The option – known as rollover – will cost you lots of cash if you do it severally. Failure to repay your loan can also profoundly affect your credit rating.
How payday loans in Scandinavia relate to those in the United States
SMS loans are now a worldwide phenomenon. In both Scandinavia and the United States, the loans are very popular. The loans are both helpful to the lender and the borrowers. Even though there are restrictions which apply on SMS loans, there isn’t any other country that is experiencing a similar situation to that in Scandinavia (Finland and Sweden in particular). People in the country can access reasonably priced payday loans within a short time. This industry is also significant in the area, and expectedly, it won’t change soon.
In the United States, the government has set rules to restrict SMS loans lenders’ ability to benefit from higher interest loans. Borrowers should repay the loan with 14 days after their paycheck has arrived. And like in Scandinavia, the payday loans in the United States also accumulate higher interest rates. However, in some States, the interest rates do not exceed the set limits. For example, in Minnesota, lenders cannot charge more than 33% on a loan between $350 and $1000.