04 February, 2009

It has been indicated that the demand for short-term instant approval loans stayed swift through the whole autumn.

According to a study conducted by the Federation of Finnish Financial Services (FK), the development in the credit portfolio was 8.8 per cent on the figures for 2007 at the end of last November. In other words the development rate was equal to that in the last year.

Presently, a total of about 1.3 million Finnish citizens of less than 75 years of age have entailed these loans. On the whole the portfolio of short-term instant approval loans was EUR 12.1 billion at the end of November.

The proportion of short-term instant approval loans assured by deposit banks amplified last year. These loans help to sort the demand of emergency expenses on time.

This was an important change in the growth that had sustained for many decades, concerning the robbing of the market of the banks by several credit cards, hire-purchase plans, and instant loans.

On the other hand, the secured consumer credit loans of banks continue to be the most affordable way to take out a short-term instant approval loan.

Furthermore, FK reports point out that the interest rates of the new instant approval loans that are assured by financial institutions have come down, having been on average 5.8 per cent in November 2008.

FK financial officer Ulla Halonen reveals that this growth could have had an impact on the status of the instant approval loans assured by banks.

According to the estimation of Halonen,"It is possible that consumers are considering a bit more cautious about which kind of short-term borrowing would be more effective."

FK reported that the interest rates of bank overdrafts and credit cards are higher than those of the instant approval loans assured by banks. The average rate of interest for the new overdrafts assured on bank accounts was 12.3 per cent.

Thus short term loans and small amounts the yearly rates of interest for instant approval loans that is the kind that can be organized by a simple SMS message amount to hundreds of per cent.

According to the study, the number of new instant approval loans was almost 780,000. On average such a loan was around EUR 190, with a repayment period of 28 days.