Sms loans are a collective name used for different types of small credits. The name lives on from the time when this type of credit was introduced in Sweden in 2006. These credits are often called “sms loans” because they send their loan application and are notified of the loan’s grant via SMS.
Sms loan size
Most companies doing this type of business offer loans of various sizes. Returning customers can often be granted loans of larger sizes than new customers. The most common loan amounts are $ 1000, 2000 and 3000 $. Some companies also offer larger loans up to $ 15,000. In the beginning, it was also common for companies to offer loans of $ 500, but this amount has been phased out in most companies.
Application for sms loans
Originally, the application was submitted only via SMS, but the companies have developed and it has become increasingly popular to apply for credit through the loan institutions’ websites. These similar credits are often referred to as web loans. Other names for similar loans are mobile loans, quick loans and micro loans. The most commonly used term for these credits is still sms.
Customers who apply for a sms loan for the first time are called by most companies to be able to ensure that they have understood the terms of the loan and to check that all information is correct. This is also done to exclude money laundering. Finansinspektionen has taken note of the companies’ routines for identifying their customers, and this has led to the security being tightened around sms loans.
When applying for a sms loan, credit information is usually not made at UC, Upplysningscentralen. UC is the credit reporting company used by the major banks to collect information about customers before any credit is granted. Instead, a credit report is collected from other companies where a copy of the request is sent to the population registration address, SMS or by e-mail.
Cost and repayment of sms loans
Many players in this market have a maturity of 30 days for their loans, but there are also those who have a higher maturity of 45 days. Upon repayment of the loan, the original loan amount is repaid as well as a setup fee for the loan and interest. The total cost of a sms loan is converted to effective interest rates very high. It may seem misleading to compare sms loans with effective interest rates as they have a maturity of 30 days and the effective interest rate is calculated on cost per year. The companies that offer this type of credit are often criticized in the media and sometimes they talk about usury rates.
The serious companies that are in the market for sms loans are very clear with their pricing and do not hide charges for their customers.
A loan that is not repaid on time ends up relatively quickly with the respective collection company and thereafter relatively quickly with the petitioner. It is therefore important that you do not borrow on the wrong grounds and that you are sure to be able to repay the loan on time. Something that has been extensively rewritten in the media is cases where people have taken out a new sms loan in order to repay another. You are then told that the customer has ended up in a “debt trap”.
If your sms loan should end up with debt collection and you are afraid that the case will go to the petitioner, you are wise to contact the current debt collection company. There is then a great chance that you have the opportunity to set up a installment plan. By following this installment plan, your case does not end up with the petitioner and you do not have to receive a payment note.