Looking for Instant Payday Loans? Explore Better Options

Sometimes you have to take out a loan. Maybe your income has temporarily become lower and your car has broken down. In these cases, a loan could be the solution to get back on your feet.

But before you decide to take out a payday loan, look into the possibility of applying for a regular personal loan instead.

By choosing a private loan over a payday loan, you will save thousands both today and in the future.

Why Payday Loans? Save Money by Choosing the Right Loan

Taking out a quick payday loan can seem tempting when your financial situation is in a bad state. But the terms on this type of quick loan are often bad, and we advise you to read through our advice before you make too quick a decision.

It will pay off!

Here we go through the difference between payday loans and a more traditional personal loan – as well as the pros and cons of each loan form and how much you can save with the right type of loan.

Here’s Why you Should Choose Personal Loans Instead of Payday Loans

Instead of taking out a payday loan, you can apply for a private loan in Sweden via Sambla. With only one credit report, we compare offers from over 40 banks and lenders for you.

• Get the cheapest loan by comparing several lenders
• Smooth application and quick response
• Only one credit report via UC

Via Sambla, you will be able to apply for a loan for as small as SEK 5 000. We always compare the effective interest rate so that you are not misled by hidden fees – something that is often found with payday loans.

Here you can make an application in just 2 minutes and then get a quick answer!

What are Payday Loans?

A payday loan is a short-term unsecured loan. The term payday loan refers to when the borrower writes a check to the lender for the payday salary – and gets part of that sum in immediate cash. It is also referred to as “cash advances”, as you get your payday salary in advance.

Today the process of writing a check isn’t always relevant – but the term payday loan still describes a short term loan characterized by high interest rates.

Did you know? In Sweden payday loans are called “SMS-loan”, as you used to use a text messaging service to borrow money in the early 2000’s.

Here’s what usually characterizes payday loans:

• Small loans, often not bigger than SEK 10 000
• Fast payouts
• Short credit period where the loan must be repaid within 30 to 90 days
• High interest rate
• Payment during weekends

These characteristics are still true to a large extent for what we call payday loans today. But one difference is that the amounts offered in the form of instant loans or payday loans have become bigger.

Today one might compare payday loans with quick loans – these are still relatively small amounts and the interest rate is often unnecessarily high.

The Market for Payday Loans has Been Regulated in Sweden

Since 2006, the market for payday loans has been regulated in Sweden to protect you as a consumer. With several lenders that provide payday loans the nominal interest rate is low or non-existent – but due to expensive fees, the effective interest rate can still be very high.

Around 2007-2008, several of the major Swedish banks began to limit their assets towards payday loan companies. Some banks completely canceled their agreements with the payday loan companies, while other banks introduced time delays for the payments.

Since 2014, all lenders who offer payday loans in Sweden must apply for permission for this from the Financial Supervisory Authority (Finansinspektionen).

The Consumer Credit Act was Amended in 2018

On behalf of the government, an investigation was launched in 2015 to place even stricter requirements on the payday loan lenders.

In 2018, an amendment was made to the Consumer Credit Act in Sweden where an interest rate cap and a cost cap were introduced.

By law, the borrower must now also be informed through a warning sign if the effective interest rate is over 30 percent. It says that the loan is a high-cost credit and there is information on where you can get help with debt issues.

How do You Take Out a Payday loan?

Since the internet became standard in our society, as we stated earlier, physical checks is often not used when taking out a payday loan.

Instead you fill in an application via the lender’s website where you state the amount you want to borrow and fill in your personal data. Once you have submitted the application, you wait for the lender to process it. If the loan is granted, you’ll receive the money in your account – often during the same day.

Payday Loans With Low Interest?

Are there low-interest payday loans? It depends on how you look at it – but the short answer is often no.

But to sort that out, we must first sort out the difference between nominal and effective interest.

• Nominal interest rate = the interest rate “on paper”. The percentage of the total debt you have to pay back to the lender as a fee for your loan.
• Effective interest rate = the real interest rate. When you talk about effective interest, you count the nominal interest, but also all the fees that come with the loan. That is what you actually have to pay for your loan.

Interest on Payday Loans

Many payday loan lenders state in their marketing that they offer interest-free loans or that the interest rate is very low. But then they are usually referring to their nominal interest rate.

If you instead look at the effective interest rate, you will notice that the interest rate is in fact much higher than on a regular private loan. That’s because they charge high fees for setting up the loan and sending out invoices.

It is not rare that the effective interest rate on a payday loan is several hundred percent – a result of the loans being small but the costs being high.

When we compare loans we present the effective interest rate to you as customer – so you will never feel cheated!

Read more: Savings account

Limited Interest Deductions for Payday Loans

Another thing that affects your costs for loans is interest deduction. Annually, you have the right to deduct 30% of your interest costs on your tax return. A benefit for you as a borrower that makes your loans cheaper.

But this ONLY applies to the interest cost itself, i.e. the nominal interest rate. This does not apply to other fees for the loan such as set-up or invoice fees.

As it is often the type of fees that are high with a payday loan, you will miss out on getting tax return if you take out that type of loan. With a regular private loan, the difference between nominal and effective interest is lower and you can deduct a larger part of your loan costs.

Facts about ‘Instant Payday Loans’

The big selling point of payday loans has always been the fast and direct payment. Many lenders who provide payday loans advertise that the money can be in your account within a few hours of submitting an application.

But today that is not always true.

This is What You Should Think About in Order to get The Money Quickly

If you are looking for a payday loan with immediate payout, you must first check which banks your potential lender cooperates with – and whether you can get the money in the account already the same day.

However, most lenders in Sweden pay out payday loans directly to the account if it’s in one of the major banks Swedish such as Swedbank, Handelsbanken, Nordea and SEB. Then the money will be deposited into your account immediately after an approved credit check.

Apply During Opening Hours

But in order for payday loans with direct payout to be able to go through on the same day, you must submit your loan application within the lender’s opening hours. If your application is received too late, the loan is usually paid out the next day. And far from all lenders pay out money on weekends.

But if you have submitted your loan application on time, been approved by the lender during a credit assessment and have the right bank, the money can be in your account within minutes or hours.

Quick Application Also Possible With Personal Loans

That payday loans were unique in how quickly a loan could be granted also applied more in the past. Now it is easier than ever to apply for a personal loan online. You fill in our form in just 2 minutes and then you will receive an answer and the money in the account within a couple of days.

And at the same time you have compared over 40 lenders to get the lowest interest rate – and you avoid all the high fees that come with a payday loan. The right choice if you ask us!

Does Payday Loan With Payment on Weekend Exist?

Unlike traditional loans, which are only paid out during weekdays, there are several payday loan lenders who pay out loans on the weekend as well. Different loan companies cooperate with different banks and it is important if you are going to take one that you check that the payday loan can be paid out to your bank account.

It can also be good to know that the lenders usually do not have as good opening hours on the weekend as on weekdays.

The loan is normally not more expensive to take out during the weekend, but common to many companies that offer payday loans during holidays is that they already have a high effective interest rate.

The weekend loans also have in common that no credit report via UC will be taken. Instead, your credit check will be done via another company.

Payday Loan Without Credit Check?

Many payday loan lenders do not make a credit report via UC (the biggest credit reference agency in Sweden) when they process your application. But this doesn’t mean that a credit check isn’t carried out – because this must be done according to Swedish law.

Payday Loan Without UC

When payday loan companies communicate that they are lending money without UC, this means that they are using another company other than UC to get your credit information – popular ones in Sweden might be Bisnode or Creditsafe. These do not share their data with UC.

At Sambla, UC is always responsible for the credit information. They are market leaders and trusted and hired by all major Swedish banks.

When you are applying through us, only one credit report is taken even though your application is sent out to over 40 banks. Having a lot of credit reports on your name means you’ll get worse loan terms and higher interest rates.

Payday Loan With Payment Remarks

If you’re having payment remarks, getting a payday loan could still be possible – but it will affect your chances of getting a cheap loan. When the lender does a credit check on you, they analyze your ability to repay the loan – and defaults will make the loan more expensive.

But a payday loan is not the only solution for you, even though you have payment remarks. Instead of a payday loan, Sambla can help you with a private loan, even though you have up to ten payment remarks.

Consolidate Your Previous Payday Loans

We always try to find a solution for you based on your circumstances, and with us you can also apply to consolidate your previous loans and credits at a new, lower interest rate.

The basic requirements for you to be able to borrow money through Sambla are that you have a monthly income of more than SEK 8 400 and that you have been debt-free with the Swedish Enforcement Agency for six months.

Payday loan in spite of the Swedish Enforcement Agency (Kronofogden)

The rules regarding the Swedish Enforcement Agency also apply to all lenders that offer payday loans. It is therefore also not possible to take out a payday loan if you have debts at Kronofogden. You must have been debt-free at the Kronofogden for at least six months in order to be granted a loan.

Do You Really Need a Payday Loan?

When your household finances won’t add up, it’s easy to panic and think that you have to get more money right away – preferably yesterday.

But taking a quick payday loan costs an unnecessary amount of money. By just waiting a few days and following the tips below, you can save a lot of money in the long run.

Here are some tips on what to do before you decide:

• Check if you can pay your bills a few days later. If you have paid your bills in time before, companies could be able to give you an additional 30 days of credit. You can just try calling the customer service and talk to them. You have nothing to lose, and they might be more understanding of your situation than you would think!
• If both the bank account and the fridge are gaping completely empty, you can look into the possibility of selling some old things on the internet, or temporarily borrowing some money from a good friend or a family member.
• Consolidate your debts and get a better installment plan with a lower interest rate. If you have multiple loans, this is the best way to avoid more bad payday loans. You can easily do this in the form at the top of the page.

Payday Loan Without Income

If you have just gotten a job or are studying, there is no income reported on you at the Swedish Tax Agency. When a credit report is taken, the lender sees your income for last year – and it will look like you have no income at all.

Even though you have no reported income, in some cases you can get a payday loan by sending in proof of employment or a study certificate. But if you are granted a loan despite having no declared income, you can expect to receive a higher interest rate than what the company traditionally offers.

Banks and lenders love stability. With them, it looks better that you’ve made money at a steady level over a long period of time. The fact that you have no income registered at the Swedish Tax Agency means that they see you as a customer with a higher risk.

Explore the Possibility of a Co-Borrower

If you have no income registered with the Swedish Tax Agency and are currently without a job, a payday loan will be more difficult to get. Then, as a rule, you must have the help of a co-applicant for the loan to get it granted.

With a co-applicant, people without income can also apply for a loan with Sambla free of charge.

Should You Take a Quick Payday Loan – Or not?

We started this text with the fact that you can save a lot of money by choosing the best form of loans. Something we hope you’ve learned throughout this text.

If you came here looking for a quick payday loan, you have now received several tips on how you can save money by choosing a better loan. You have also received tips on how you can have a dialogue with your suppliers if your ability to pay has become weak at the moment.

You have also seen the difference in interest rates with a quick payday loan and a more traditional private loans. You’ve seen how much interest and fees affect the total amount you have to pay back and how you can affect the total yourself by repaying more than the original installment plan.

You have also learned that multiple loans mean many credit reports, something that lowers your credit rating and can mean more expensive loans in the future.

Skip the Payday Loans in The Future

Instead of payday loans, make a budget of your personal finances and take out a loan using Sambla. Sambla’s service is free of charge and we cooperate with over 40 banks and lenders so that you get better terms. Get your finances in order today with one loan instead of several small ones!