In physics, time is defined as the distance between two events. When you talk about borrowing money quickly, these two events are a loan application and that money has ended up in your account. In today’s society and with the technology available, we expect things to happen in real time in principle. We have been living with something called fast or sms loans for close to a couple of decades now, but there are more types of loans that are fast.
Fast loans and SMS loans have been synonymous with loans
A text message or a click, a quick credit check on someone, and the money has been sent from the lender to your bank account. A debt with a high interest rate, sometimes high fees and the cost can easily come to light if you do not have time to pay. A number of regulations later, many of these expensive loans have disappeared where the remaining are now called high cost credits. However, the fast payout property has not disappeared; On the contrary, today there are more lenders working during opening hours as well as weekends and nights with loan disbursements.
Getting a loan directly is the same as paying cash to your bank account quickly after the loan application, if it is approved. Sometimes the metaphor taxi ride or bus trip is used for fast or slow loans. A loan where one has to wait for a day to pay out is generally cheaper than a loan that is paid off quickly, just as a taxi ride is more expensive than the slower bus. In the taxi / bus case you can understand the logic of this, but why should it be cheaper with a slow loan?
The answer to the question is probably that new technology and new ways of taking cost money, but when the development cost is repaid, there is no argument for anyone to continue to pay that money. Today, the technology to be able to make quick payments has existed in Sweden for quite some time and therefore it is not as logical that it will be more expensive for end consumers to use services like these.
Many new banks / credit institutions, or so-called fintech companies, have understood. For example, Lendify believes that the traditional wig stock Banking Day is dead – Lendify’s lowest possible interest rate is 2.95%, among the lowest in the private loan market. Similarly, Rocker, which has among the cheapest account credits on the market, has payment within 5 minutes.
How to get a quick payment?
In many places it can be read that the application must be made during the creditor’s opening hours. This does not always have to be the case. Today’s technology is used by many lenders and means automatic direct payment of loans if the credit check, which can also be automatic, does not show any oddities.
It is far from all lenders offering direct loans. On the web there are many lists of creditors offering loans with payment directly to the account, but it is important to read the other terms and conditions that apply. Comparing effective interest rates on loans is something that the Swedish Consumer Agency recommends. It is also important to know that you have the right to cancel your loan within 14 days if you made a hasty decision, which can be the biggest risk with a fast loan. You are then entitled to a refund, but you must pay interest for the time you had the loan.
Why do not all lenders have direct loans?
Most lenders that offer the opportunity for quick disbursement have loan amounts below USD 50,000. If you need to borrow a sum that is larger than this, it is not as likely that you will need a payment immediately. Larger loan amounts also have a greater impact on the private economy, but also a greater risk for the lender, who may then want to do a more thorough and perhaps partly manual credit check on the borrower. It is also common for lenders with direct loan repayments to use credit information other than UC – usually Creditsafe, Bisnode or Safenode.
Of all the lenders, about 20% pay out directly. Of these loans with direct payment:
- 70% also pay on weekends
- 35% accept payment note
- 90% have loans without UC
Fast payments for 27 million people
P27 stands for 27 million people living in the Nordic countries, but now they have Norwegian DoSave Bank withdrew as it is already considered to have fast and cheap payments in Norway. P27 will “enable real-time, batch, domestic and cross-border payments quickly and at low cost on a secure and versatile platform”.
P27 aims for the first transaction to be completed in 2020. Whether this will be the case or not remains to be seen, but it is likely to take some time before the platform is fully operational for banks and institutions to use. However, that it will enable further faster payments from more Swedish and foreign lenders and other players should be a fact.