Anyone who has been following the online media lately and has been particularly interested in articles from the general credit market is likely to be the subject of intensive reporting on short-term credit to have noticed. In these reports, the tone is quite clear that short-term credit is a massive threat to potential over-indebtedness of consumers. In addition, these reports and articles often read that these short-term loans or mini-loans are all “pure credit rip-offs”. Thus, these loans would be intransparent in terms of service options and the associated costs and also clearly too expensive. The interest on a short-term loan the same lyre – all too expensive! So is the call for appropriate regulation very quickly. Exactly at this point, however, also shows the ignorance of the local circumstances of the short-term loan offer in Germany. Compared to other countries, the short-term credit offers are well-ordered and controlled. But why should this circumstance be pointed out?
Short-term credit – other countries, other relationships
Active short-term loans in Germany are often compared to payday loans in the UK or express loans in Sweden. A clear mistake, because who does this, only confirms that he has no idea about the conditions in the mini-credit in the countries mentioned. To illustrate the circumstances of short-term loans in other countries and the associated differences to the German market, we take the example of the Swedish market. The so-called express credit is widely used in Sweden and enjoys an intensive use of Swedish citizens. The problem with the matter, however, is the non-existent regulation of the existing since 2006 credit market. Since then, consumers have been able to borrow several thousand krones (several hundred euros) within minutes without proof of their creditworthiness, thanks to market liberalization. So far, so good – right?
Usual interest in Sweden-type mini-credit
Not at all, because in Sweden exactly what is criticized here in Germany for the mini loans and that is true usurious interest rates. In recent years, for example, there have been repeated instances of instant lending to gambling junkers or loans with an interest rate of 23.707 percent. For example, a lending company asking for a loan of more than 1,000 kroner after 30 days demanded a whopping 1,568 kroner. Understandably, this procedure led to considerable public criticism and so lowered the “financial institution” – almost as “accommodating” – the interest rate on “only” 5,641 percent. Properly read – at a significantly reduced 5.641 percent for a 30-day loan! Any questions?
Thus, one thing remains to be seen: Who compares offered in Germany short-term credit with those in neighboring countries, which certainly also tends to ” apples with pears ” to compare. Short-term loan offers, such as those offered by The Borrowers, are both legal and regulated. Secondly, the local credit facilities are miles away from short-term credit offerings in other countries such as Sweden and the UK. Anyone who compares here and does everything about a comb, simply did not understand anything! And obviously not bothered to “understand”.