Payday loans

Marketing for payday loans is often aggressive and emotionally engaging. Credits like these are quick and easy to receive, but repaying them may be difficult due to high interest rates and charges. It is very important to carefully study the credit terms and conditions before signing any credit or loan agreement.

Efforts have been made to cap the interest rates of consumer credits by amending legislation:

• For consumer credits taken out before 1 September 2019, there is no interest rate cap (maximum interest rate). For example, at an effective annual interest rate (or annual percentage rate of charge (APRC)) of 216%, a EUR 2,000 loan may accrue EUR 3,007.07 in interest, making the total cost of the loan EUR 5,007.07.
• From 1 September 2019 onwards, there is a 20% interest rate cap on consumer credits. For example, at an actual annual interest rate of 20%, a EUR 2,000 loan may accrue EUR 223.34 in interest, making the total cost of the loan EUR 2,223.23.
• Temporary amendments have been made to legislation on consumer credit interest rates, aiming to temporarily lower the interest rate level of consumer credits in order to make repayment easier. See the press releases of the Ministry of Justice on the amendments (in Finnish and Swedish):
• From 1 July 2020 to 31 December 2020
• From 1 January 2021 to 30 September 2021

Know your credits

• Find your credit agreements and familiarize yourself with the effective annual interest rate, the repayment period and other loan costs. Read more about comparing loans.
• Take a look at your invoices. Are you paying off the principal or are most of your repayments on interest and charges? What is the repayment schedule for your credit? What are the total costs that you will have to pay over the repayment period? The smaller the monthly payment, the longer the repayment schedule.

How to get help with payday loans

• You can try to negotiate with the lender on lowering the interest rate, charges or payment instalment.
• You can also apply for the moderation of your payday loan interest costs if the credit was taken out before 1 September 2019. For instructions, see the Finnish Competition and Consumer Authority's instructions.
• Once the credit has become due for payment, the creditor may charge you the interest rate specified in the credit agreement as the late-payment interest for 180 days. After that, you will have to pay the general late-payment interest, which is approximately 7%, on the unpaid amounts.
• If you are unable to pay the amounts you owe, you can contact the creditor and request for the amounts to be transferred to debt collection. Debt collection takes place under a district court judgment in an enforcement process. Requesting this may help you save debt collection costs. Read more about the debt collection process.
• To improve your financial situation, you often need to take into account a variety of factors. Take a look at the page ‘Financial self-help' for more information about the options available for you to improve your financial situation.