SMS loans (lån) in Scandinavia and how they compare with those in the United States

Jämför SMS lån

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.

Tips for Using SMS Loans

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89794830-women-loan-300pxWhen you need money urgently, you’re tempted to go to your friends or your family. If you have a credit card, you’re also tempted to use it for withdrawing money from it and using it as you want. However, it’s not always advisable to do so, because it can get you into more financial troubles.

The SMS loans are used for situations when you need money urgently. Wondering what an SMS loan is? The answer is very easy – it’s a short-term loan that is within different financial institutions. You’ll be able to get an SMS loan even if you have a bad credit history, but you need to pay attention to several things.

Let’s see some tips for using SMS loans.


The Problem

An SMS loan has a very high-interest rate, so when you think about contracting this type of loan, you also need to answer a major question – why do you need the loan? It’s not worthy to get this sort of loan if you can wait some time for being paid or getting the paycheck.

The interest rates are so big, so  it is possible for people to enter a cycle of repetitive debt. A debt spiral is very hard to avoid, and you need to pay attention to many things. You need to be true to yourself and evaluate the reason why you need the money. Achieving your goal can be substantial, but it’s more important to pay attention to the money that you will have to give back. It’s great to use an SMS loan for an unexpected purchase, but it’s not recommended to use the money for paying the bills or for living expenses.


The Details

If you still consider getting an SMS loan, you also need to know how much money you will have to give back. It is critical because different financial institutions that have this type of loan will have different interest rates and you’ll have to give back a lot of money.

Because of the typical annual percentage rate (the APR) and the interest rate, you’ll need to know exactly how much money you need to give back because this can make the difference between getting the loan or not. You need to read everything in the contract, even the fine printed lines and ask as many questions as you need until you get everything clear.


Multiple Lenders No

It is another rul12112838-sonic-cash-loanse that you have to have in mind constantly. Using more than one lenders will make it harder to pay back all that you have to pay. Just imagine that if you consider five financial institutions and if you ask each of them to give you $100 each, you will have a total of $500. However, when you have to give back the money, you’ll have to give more than what was taken, and that $500 can transform into $1500, as you might have to pay $300 to each of your lenders.

It’s hard to do this thing, so it’s always advisable to use only one bank at a time. If you can afford to give back all the money, then take a larger amount. However, don’t use more than one lender because it can bring you into a debt spiral that is very hard to exit.

In the end, you need to pay attention to everything that you sign with an SMS loan because you’ll have to give back the money in a very short amount of time and it’s important to make sure that you can pay it in time.