Finland braced for short-term boost in defaults after restricting interest levels on loans

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A law that is new into force on Sunday restrictions interest on customer loans to 20 %, making life burdensome for payday loan providers.

Credit gets a revamp from 1 September, whenever a brand new legislation restricting the expense of borrowing comes into force.

From that date loans can only just be studied out in the event that interest is below 20 per cent each year. In addition, other expenses related to loans will likely be limited by 150 euros. The interest rate cap has been 50 percent on loans of up to 2,000 euros, with no limit above that figure before the reforms.

Mortgages and auto loans are excluded through the reform.

The target is to reduce over-indebtedness, however in the term that is short anticipated to induce a growth in re re re payment defaults. Continue reading