I know I have been on this topic before on a number of occasions but I find it daunting how the media writes about micro loans.
The first thing I should make clear is that I have never taken a micro loan myself and I have no plans to do this as I think it is too expensive in most cases. I also have such large margins in my economy that I have never been in need of this. However, I do not in any way think that this type of loan should be prohibited, since it is in my eyes up to the individual to decide for themselves whether it wants to borrow or not.
The Express gives way to the fight
Expressen, which is part of the media and thus of course also works hard to counteract this type of loan, has been hooked on what everyone else has written about in recent days. This is because Loan and Credit has a loan with an effective interest rate of over 23,700%.
There is absolutely no talk that this is a very high interest rate but how interesting is it really to know what effective interest rate a micro loan has? Well it can be interesting to compare two different identical loans but otherwise it is an uninteresting figure. For it is calculated on an annual basis, which means that it is the same as saying that you would borrow money and then continue to borrow money to repay the borrowed money for a whole year. Which of course not reasonable.
When it comes to mortgages or private loans it can be good
However, it is not much smoother to say that a loan of USD 1,000 would cost USD 568. In my eyes, this is much easier to understand than the effective interest rate of 23 707%. Although maybe I am.
Furthermore, we must also remember that it is always the most expensive examples that are mentioned. There are actually lenders that are significantly cheaper. Loan and Credit itself has a cost of USD 193 for the new customer. Or 756% in interest as it is.
Imagine what a good day it would be for a normal review of this industry and not an attempt to throw everything away all the time. That is something I would like to achieve. The goal should, of course, be to reduce the number of people who end up at Kronofogden with debts that come from micro loans.