The loan market in Sweden

Since the 1st of July 2014 pure lenders and loan intermediaries in Sweden must be authorized by Finansinspektionen. This is not always the case if the credit is given as payment of products or services. They must follow the law described in Konsumentkreditlagen as well as guidances given by Finansinspektionen and Konsumentverket.

Visit Finansinspektionen: https://www.fi.se

Konsumentverket is the authority supervising the lenders making sure they follow the regulations. The supervising includes e.g. how the lenders perform credit checks and marketing.

Visit Konsumentverket: https://www.konsumentverket.se

Some of the laws that must be followed when giving credits for personal use are:

• Konsumentkreditlagen (The main law e.g. regulating the agreements between the lender and borrower)
• Kreditupplysningslagen (The law regulating credit checks, e.g. for how long different types of information can be saved in the register)
• Räntelagen (Regulating payment conditions and to some extent interest rates)
• Lagen om skuldebrev (with more details about the loan agreement)
• Skuldsanering (Laws about debt restructuring, i.e. when the borrower is wholly or partly released from liability for the payment)
• Inkassolagen (The law about debt collection)

You can find around 250 lenders or actors providing loans in Sweden including traditional banks, consumer credit institutes and residential Credit institutes. Many of those possesses more than one brand and there are also white label solutions.

Some of them provides only one type of loa, e.g. instant loans, credit accounts or personal loans while some provide more types. A common way to loan money is to go through loan intermediaries having partnerships with 20-30 creditors, competing about the borrower with their interest rate.

The cost for the loan is the interest rate and fees. Common fees are starting fee, often around 400 SEK and administration fee, 0 - 40 SEK, depending of whether the invoice is on paper or electronic. The interest rate depends on type of loan and spans from around 3 % to 40 %.

There is a section in Konsumentkreditlagen describing a roof for the interest rate and the total cost, if the APR is higher than 30 % plus the reference rate, decided by Sveriges Riksbank. For these credits the maximum interest rate must be 40 % and the total cost for the loan must not be higher than the credit amount.