Higher limits for short loans – Changed terms for loans
Since 2006, when fast loans made their entry into Sweden, loan limits have been gradually increased. In fact, the maximum loan amounts have almost doubled in just over a decade. Read more at simplicol-kraski.com
The reasons for this are several, and the trend is likely to continue for years to come. In this article we go in depth about the phenomenon of higher loan limits.
Why raise loan limits?
The main reason for raising loan limits is that demand for larger loans is constantly increasing. The fast loan companies do not work in a bubble, but they try to offer the products that customers demand. Was there not a demand for larger loans even earlier? Well, the demand for loans of USD 30,000 or USD 40,000 was also clear for example in 2006. The difference compared to now was that there were only a few players who could offer private loans of this magnitude. These players were also relatively restrained in lending.
Another reason, of course, is that prices in society have risen over the past decade. A loan of USD 10,000, for example, does not go as far today as before.
Finally, it should also be mentioned that successively tougher requirements regarding consumer credit mean that fast loans are a much worse deal than before. In order for lenders to make money on their business concept, higher average loan amounts are required today, not least to cover the increased administration and credit control of the loans.
Are the conditions for borrowing tougher?
It is not easy to answer the headline question. The short answer is that “it depends”. Obviously, for example, a higher income is required to be able to borrow higher amounts, but there are more factors than raising.
A quick loan is a somewhat special product within loans because the maturity is so short. Today, there are no lenders who can offer fast loans with a maturity of more than three years. Those who do, which you can find if you compare fast loans here on the site, actually offer private loans. If the loan limit is raised at the same time as the maturity is the same, of course, higher demands are placed on both ability to pay and creditworthiness. If the maturity instead is also extended, the requirements should not need to be tightened to any great extent.
Furthermore, if the interest rate is set individually, any effects of a higher loan limit will be even less. The lender can then offset any increased risk with a higher interest rate. It is a strategy that has already been adopted by a couple of lenders and for some new fast loans, and which is guaranteed to become even more common in the future. lender.
The new law can revamp the fast loans
A new law on so-called high-cost credits will take effect on September 1. The main points of this legislation are:
1) a loan must not cost more than 40% (+ reference interest) in interest
2) the borrower must not pay more than 100% in interest and repayments in relation to the loan amount.
There are many possible effects of this legislation. One effect that is expected to become current soon is that the lowest loan amounts disappear completely. For example, borrowing USD 1000 for 30 days will probably be impossible from 1 September. The reason is that it becomes impossible for lenders to gain profitability in such a product.
Another effect is probably that more and more lenders for quick loans and sms loans raise loan limits up to USD 30,000 or USD 40,000. The reason is that volume is required so that the restrictions on interest rates should not have too much impact on profitability.