Let’s Review SMS Lån Pa Minuttet (Translation for SMS Lån Pa Minuttet: SMS loan in a minute) 

The Scandinavian Nations, most specifically the Nordic countries, follow a comparable way of life, particularly with their objective of functioning as a cashless economy. Norway sees minimal daily cash transactions, with its economy being relatively cashless already. 

Sweden and Denmark, part of the Scandinavian Nations, have chosen this path after recognizing the advantages with Finland following in the Nordic countries. 

These regions boast of being among the top six worldwide for their cashless objective toward the economy, with positive outcomes thus far. For this reason, the financial industry in the countries is able to implement a digital system, including SMS lending. 

Doing so has not been without its share of difficulties, however. As we move forward, we’ll explain what these loans involve and the challenges they pose. 

What Are SMS Loans 

With an SMS loan, a borrower forwards the loan application to the lending agency
via text message, and the loan provider responds in kind. For more details on this
process, follow at this website here – https://forbrukslånlavrente.com/sms-
lån/. These lines of credit are short-term, with creditworthiness being a recent
mandate from legislation for approval. The reason for this was that predatory
lending practices were being used.

Advantages clients experience when applying for SMS loans include the following: 

  • The process is relatively straightforward 

Despite legislation implementing criteria including creditworthiness for approval, the loan process is considered pretty simple compared to conventional lending. 

Aside from lenders assessing credit, the borrower must provide valid ID, proof of residency, income statements, and other documentation. In addition, a valid phone line for sending the lending details must be registered. 

This is a primary factor for the loan approval and ensures security for you as the borrower. No one else will be able to use your phone line in an attempt to secure a loan. 

  • The SMS loan is unsecured 

These loan products are unsecure, or no collateral is needed. That means you won’t need to supply the lender with a valuable asset to back the funds if the loan defaults. The loan provider will be assuming the risk in this instance. 

You will promise to repay the funds by signing the loan application. In some countries, if there is a default, the lender can attach the borrower’s wages to recover their loss or pursue a claim in court. That might not be true in all regions. 

  • What Are Challenges Borrowers Experience With SMS Loans 

Legislation has been mandated on SMS lending following what was found to be predatory lending practices. The laws now require lending agencies to follow stringent guidelines, with borrowers needing to meet specific criteria for loan approval. 

A primary consideration is registering a phone line for optimum security practices. This disallows anyone from applying for a loan using your phone number. Also fundamental are creditworthiness and financial standing. 

While borrowers find the application and approval process straightforward, there are also significant challenges those choosing this option face. Some include the following: 

  • The rates are exorbitant 


The people applying for SMS lending are ineligible for conventional loans due to poor credit. These loan options might accommodate for less-than-favorable credit standing, but it comes with the expense attached to the product is excessive. 

You must be in dire need of the funds to be willing to pay such exorbitant rates. It can lead to significant debt cycling. This has been seen in some regions where chronic debt is becoming an issue, with the government needing to step in. 

  • Negotiating is difficult, if possible at all 

Because the lending process is digital, there’s no opportunity to talk to a live person making negotiating virtually impossible. The rate, terms, and conditions the lender offers are essentially a bottom-line approval, whether the borrower accepts or not. 

Those who find the loan too outstanding to fit their circumstances must either decline the offer or try to make the lending agency’s offer work with their existing budget. You could be in a difficult position if the funds are critically needed. 

  • Some lenders use the SMS system for marketing purposes 

In an effort to bring loan leads, some loan providers use the SMS system in a marketing format to send spam out to the public to provoke leads. No one wants spam sent to their mobile, but preventing the messages has proven challenging. 

What Is The Current Status Of SMS Lending In These Countries 


Many fiscal policies have been implemented by the countries considering the SMS loan downsides. In some regions, restrictive measures are being put in place more so than in other areas like Sweden due to SMS lending agency excesses. 

  • Measures taken in Norway 


Norway continues to be a leader in its efforts for a cashless economy. The region is not taking the same measures as other areas regarding the SMS lenders’ excesses. That isn’t to say there have been no fiscal measures taken, but these are not close to the restrictions placed by some other areas. 

Until interest rate caps are presented, financial analysts remain firm in their stance. What measures have been taken? To Norway’s credit, they are the first to bring the concerns regarding the practices to light in the early 2000s. 

This helped lead to new nationwide legislation that included mandating creditworthiness as a condition of approval for loans. 

An immediate response to this legislation was a decrease in lenders providing these lines of credit due to added costs second to having to do these checks. Plus, these created delays in the approval process, causing borrowers to search for alternatives based on their needs. 

Some financial analysts find the lack of capping the interest in Norway an unclear decision despite the other efforts. Without this additional restriction, those lenders providing the lines of credit impose exorbitant rates. 

  • Measures taken in Denmark 


Denmark has been the most active and restrictive of the Scandinavian countries despite Norway’s first move. The regulations intend to stave off lending agencies’ excesses by implementing credit checks with disbursement extended to a 48-hour time frame. 

The loans with extraordinary APRs (annual percentage rates) are a primary consideration. The region has prohibited predatory lending. The creditors will be unable to take advantage of borrowers’ desperation or lack of knowledge by imposing less-than-favorable terms and conditions. 

A primary step in that direction is placing a cap on interest rates. These cannot exceed 35 percent, with the consideration being the best interest of the borrowers. Prior to making this regulation, rates were soaring as high as 800 percent. 


  • Measures taken by Sweden 


Unfortunately, Sweden was the least proactive among the countries. Only when things became a concern did the region do something while Denmark and Norway made strides. 

That’s despite the fact that the country was witnessing an unprecedented number of debtors filing bankruptcy, with the media having a field day. The lawmakers from that point decided to follow Denmark and Norway’s example by mandating credit checks. 

Lenders could only provide small loans if they validated these details. Another mandate forced lenders to advise potential clients of the lines of credit’s high-risk terms and conditions. Following Denmark’s example, talks are still in the works regarding imposing rate limits. 

Final Thought 


SMS loans can benefit borrowers in the sense clients get the funds they need for emergencies or unavoidable expenses rapidly. Approval time is almost instant if the criteria are met, but disbursement in some countries can take longer with the restrictions in place at this time. 

The regulations were necessary for these countries when it was found lenders were acting in a predatory capacity taking advantage of borrowers with unsavory terms and conditions and exorbitant APRs. 

These concerns have been addressed, with a couple of countries still needing to make a few more concessions for their clientele.

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