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Instant loans carry hefty cost: 22 million euros

Firms in the instant credit business granted loans worth 19 percent more in the second quarter than during the same period last year.


The loans, often granted via SMS to mobile phones, amounted to 94 million euros, according to Statistics Finland. That represents growth of six percent compared to the period between January and March, and of 19 percent compared to the second quarter of 2012.

A total of 384,000 separate instant credit loans were granted. Their average value was 246 euros and the average repayment period was 34 days.

Some 22 million euros in separate costs were paid to instant loan firms in the same period.

At the start of this parliamentary session the government proposed tighter restrictions on instant loan firms.

The government’s proposal is for an interest rate ceiling of 50 percent above base rates on loans of less than 2,000 euros.

Some MPs would like to ban this type of lending altogether.

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