Finally, you also want to focus on lenders marketing their loans and loans in a good way. It is important to be moderate and not try to attract the borrower too much. Marketing should not be intrusive and it should mainly be informative and factual.
In the past, many people have been able to see or hear advertisements that try to paint a scenario where it is natural to take an SMS loan to buy a pair of shoes or a jacket just because you are hungry, even though it is really an irresponsible way to handle their economy and that it can lead to financial problems. Now we may not have to see this kind of misleading advertising.
How do the rules affect the market for SMS loans and fast loans etc?
These two rules mean that it is a little difficult for lenders dealing with fast loans as these loans usually have a high interest rate and for the small loans the cost can sometimes exceed the loan amount. If you still want to offer these smaller and more expensive loans, you have to adapt to follow the rules, which is not easy.
This has led to many lenders recently choosing to saddle and invest in a different type of loan than SMS and fast loans. The most common is that they have turned to the market for smaller private loans (up to around SEK 30,000) or account credits. These types of loans and credits can often be quite expensive, but have a structure that makes it easier to stay within the limits of the Consumer Credit Act.
I, who work with loans and credits and keep an eye on what is happening in the industry every day, have clearly been able to see that many lenders have chosen to change their orientation or even close down. This shows that the rules for the new high-cost credits have really had an impact in the industry and that many lenders seem to consider that they do not work according to the old method.
SMS loans have been a very nice type of loan
And it is a more expensive loan, of course, but it is also a special concept that involves borrowing money in a shorter time than usual. A private loan always has a maturity of at least one year and then also an annual interest rate that shows how much you have to pay to get a loan during this time.
For SMS loans, it will be different as you have only lent out for one to three months. Sure, an SMS loan is usually a more expensive loan, but there has nevertheless been a place for this type of loan, since many have actually been interested in borrowing money in such a short time.
The cost of borrowing money
For only one or two months is not very high, but if you convert this into an annual interest rate, it is usually clearly more than for a regular private loan. Therefore, it will be difficult to adapt the loan to the rules of the Consumer Credit Act and the interest rate ceiling of 39.5 percent.
Some lenders have chosen to run and adapt, but others have given up instead to focus on a different type of loan. When rules have an impact of this magnitude, it is not just a few small rules that we are talking about, but a big change. The question is what will be left of fast loans and SMS loans in the future and whether it will actually be better for us consumers or if we just simply lose one type of loan.