In September 2019, a new interest rate cap on loans came into effect, which sets the maximum nominal interest rate on unsecured loans at 20%. In addition, the loan can be charged up to $ 150 per year.
The purpose of the change is to control the Astronomical Interest companies that used to charge astronomical interest prior to the change of law and thereby reduce the indebtedness of Finns in the area of express leverage.
The interest rate cap is, of course, basically a good thing for the consumer, because unsecured loans can now be obtained at very reasonable interest rates.
It is much harder to obtain a loan after the reform
This is due to the fact that due to the increased risk of credit losses banks have had to tighten their loan granting criteria considerably.
However, the criteria for granting a loan vary greatly from one loan to another, so we decided to find out where the loan is most easily accessible after the interest rate cap.
If you are having trouble getting a loan and you feel that a negative credit decision is following one another, the options below are the best ways to get a loan right now.
Why Can’t Borrow Easily After a Ceiling?
As we mentioned above, the loan criteria have become stricter due to the increased credit risk for banks. Banks are no longer able to charge astronomical interest on their loans, so they have to tighten the criteria.
However, we predict that the criteria will be somewhat relaxed in the future, as the situation has leveled off slightly. Of course, banks are constantly monitoring how their loans are repaid and how their credit losses are affected.
When enough time has elapsed since the entry into force of the interest rate ceiling, banks will be able to revise their criteria upwards or downwards based on the results. According to our information, the criteria are now set so tight that they are very likely to be lowered.
Increased competition also forces loan services to offer their loans on looser criteria in the future.
Foreign loan services Arrive in the Finnish Market
There are already many foreign loan services in Finland that also offer loans to Finns. It is expected that this trend will increase in the future.
It may not be easier to obtain a loan from a foreign bank than from a Finnish bank, but this will contribute to increasing competition in the future. This, in turn, will mean that due to fierce competition, loans are likely to be easier to obtain in the future than they are now.
However, it is a good idea to ask a foreign bank for a loan offer already, as applying for a loan is always free and does not bind you to anything.
Be wary of suspicious foreign loan services. Apply for a loan only from reputable and trusted companies, never from an individual, for example!