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Similarities and differences between sms loans and payday loans

In the past when you were borrowing money it was often very cumbersome and it could take a long time before you got any money, so far as you did not ask for example a friend or someone else you knew about money. For many, loans are associated with large sums, for example when you buy an apartment or borrow money for a house purchase. However, this is not always the case anymore, but now it can both go quickly and move around smaller sums. In the Dornic countries, the answer to this situation was the sms loan . In English-speaking countries they are called Payday loans . In this post we will go through the similarities and differences between both.

Pay Day Loans

Pay Day Loans

This is a type of service where you can borrow small amounts very quickly and this is usually done by using a mobile phone and communicating with the credit company via sms. Nowadays, it is also common for example to do this through a company website or via an app. At many of these companies, you can borrow without credit information from UC, which means that you retain your credit rating and thus do not get in trouble if you later, for example, need money to buy an apartment.

Payday loans are just like sms loans, that is, it is often quick to get the money and move around smaller sums. There is no difference between these, but it is simply called different things in the Dornic countries and in English-speaking countries.

The differences between payday loans and SMS loans

The differences between payday loans and SMS loans

Payday loans are the English market’s answer to the Dornic sms loans. When sms loans were launched in the Dornic countries in the early 2000s, they became very popular, very quickly. Not just in the Dornic countries. The concept is spreading rapidly around the world. In response to this new form of lending, lenders in English-speaking countries launched similar types of loans – though with less focus on the “sms” section and hence the name Payday loans . These loans basically work in exactly the same way as sms loans except that they use less of just sms to apply for the loan and instead there are other avenues such as applying via e-form, telephone, meeting at the bank and other traditional ways to apply about loans.

With payday loans, you can of course also apply via sms, but it is not only sms loans that are talked about, which used to be the case with the sms in the Dornic countries. Payday loans are instead what sms loans are when it comes to loan form, loan amount and loan terms but then a little wider in the form of application process and the like.

Nowadays, there is basically no difference between payday loans and sms loans except the differences mentioned above.

General information on payday loans and sms loans

General information on payday loans and sms loans

Usually these are smaller sums, usually loans of about five hundred and loans of up to USD 10,000. These quick loans have been criticized for ending up in very high interest rates, therefore, since 2014, certain special laws that apply to companies that engage in this type of business have emerged. Also in 2018, the laws received further adjustments that protect the consumer from interest rates that are rising too fast.

The most common customers are relatively young, between the ages of 18-35. In recent years, however, older people have also become customers. Since many young people suffer from reimbursement problems, it is common for companies to still set an age limit higher than 20 years.

How the process itself goes to is practically different between companies, but often the first time you take out a loan from a company you have to give some information about yourself. This information can, for example, be about annual income, what you should have the money for, if you have payment notes (loans can still be granted despite payment remarks by a large number of lenders) and so on. However, the second time, it is usually easier to get the money out. Then you often only need to send a text message and the money is deposited into the account after about an hour depending on what you have for the bank.

If you want it to go as fast as possible until the money is in the account, you should check which banks the lender uses. If they use their own bank, the money is transferred directly (credit account, among others), or if they use a bank that you also have, such as Nordea, Swedbank or any other major bank. Otherwise, it usually takes some business day before the money is in your account.

You should only use this type of service if you know that you will be able to pay back on time. You should never end up in the spiral where you apply more than once for sms loans to pay off other loans. This spiral is usually called a debt trap and is ultimately very difficult to get away from. However, it is OK if you do it sometime, if your economy needs a temporary injection of capital.

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