Lenders who lend smaller amounts through the type of loans often referred to as sms or fast loans do quite often advertise on radio or on television, to attract new customers. Their advertising can look very different and sometimes I have nothing against it.
But other times they encourage an irresponsible and bad loan
In some cases, you hear advertising for sms loans where the lender says something like: “Have you seen a nice jacket but run out of money on the account – take a loan with us” or “Do you have bad money with the cash register before Christmas – borrow with us to afford the Christmas presents ”. I do not know if I have heard exactly these formulations but it usually is something similar.
The point is, in any case, that if you have bad money in your wallet but want to buy things, it is only to borrow from them then the problem is solved. Voila – a quick loan and you can afford everything you want to buy. In some cases you might present it a little more discreetly, but in other cases you say it straight out, in a rather tasteless way.
Of course, this type of loan is largely based on the fact that customers solve their occasional cash problems by taking a small loan, although it may not be particularly cheap. That there are people who think it is simply worth it. The problem is that some lenders choose to make it appear that you can advantageously take a small quick loan every time you would like to buy something that you really can’t afford.
Christmas on credit is never good
This type of advertising occurs all the time, but it is a little sad to hear it before Christmas. Christmas is supposed to be a nice and fun time, but it is quite clear that you also feel an extra financial pressure, at least if you have a strained economy from the beginning. Everyone wants to be able to have a nice Christmas with Christmas food, Christmas presents for the children, Christmas tree, be able to visit relatives, etc. But everything costs money.
It is quite clear that there is a risk that you will lose more money than you should at Christmas and in cases where you have bad money for Christmas celebrations, there is a certain risk that you borrow or trade on credit to manage to get into a merry christmas anyway. You can of course borrow money responsibly and take care of it all well – and if you think it is the best solution then just drive.
One thing that is quite clear, however, is that small expensive loans like sms loans are not very good for solving problems with an empty wallet at Christmas. This type of loan is not so cheap and is only suitable when you have a small and temporary need for cash deposits and when you know that you can easily repay the money in a fairly short time (30-90 days).
Options if you absolutely have to borrow for Christmas
If you need to borrow money for your Christmas celebration, it would be better to use a regular private loan that has a low interest rate or that you have a credit card that you use. With a credit card, however, it is important to repay the credit within the interest-free period if it is to be a good alternative. You often have up to 60 days to pay before the credit becomes interest (and that interest rate is relatively high so it is clearly best to avoid).
What you should consider is that the amount of time you have interest-free depends on when you use the credit in relation to when the invoice comes. 45-60 days is a maximum, but it can also be clearly shorter interest-free credit if you shop short before the invoice arrives. If you want to wait the longest time to pay off your credit, you should start using the credit card right after you receive a bill.
An alternative can of course always be to borrow from someone in the family or a friend, but it also always entails a risk. It is important to repay such loans properly so that you do not damage your relationship with the person in question. The advantage is that you may not have to pay interest and that the loan repayment period can be a little flexible.
Lenders who encourage useless borrowing feel rogue
Responsible borrowing and taking responsibility for one’s finances are about not having to borrow money unnecessarily and setting up one’s finances so that one does not have to borrow money in addition to a completely unforeseen expense outside of the usual monthly budget (or on the usual occasions when occurs in a normal economy eg housing purchases, car purchases etc. when it is perfectly ok to take out a loan).
However, in most cases it can be thought that even the unforeseen expenses should be able to be met without loans if you have managed your finances in a sensible way, because then there should be some buffer saving. The buffer is saved money that is for just unexpected expenses and the like that is not accommodated within an ordinary monthly budget.
Of course, it can sometimes happen that you end up in a situation where you may need to borrow money and that is perfectly ok, but you should make sure that you do not take an unnecessarily expensive loan or that you borrow unnecessarily. Loans cost money and put the economy at risk, so if you can avoid a loan it is often better.
If a lender is advertising where they basically say that their loans are good for occasions when you want to buy something but happen to run out of money then it feels a little rogue. They basically encourage you to manage your finances in a bad way, since that type of purchase is really not recommended.
Loans are not bad in themselves, but you have to use them properly
Shopping or buying things that you don’t have a great need for with money you don’t really have is not that smart and often leads to financial worries. Such behavior can be the beginning of a fall in debt and should not be encouraged by lenders.
If you hear advertising for a lender that encourages you to borrow for the wrong reasons and in an irresponsible way, the lender should be remembered as one of those that you should avoid if you really take out a loan at some point. Simply boycott the rogue lenders. Maybe it is the marketing department or advertising agency etc that has swept over and created a bad ad, but it must also be approved by the lender in question and they have their responsibility.
Some things it is better not to borrow
Above all, one should not borrow unnecessary things. Borrowing money when buying a car is logical as you probably could not have made a car purchase at all if you had not been able to take out a loan. It is far from everyone who has a few hundred thousand SEK lying ready to spend.
It can also be perfectly ok to borrow money to afford to replace the fridge / freezer if they break a day and there is no money in the account. Hopefully you have a buffer that covers these costs but if you do not have it then a loan can be approved. It is still an important thing to spend your money on.
Something that is not as ok is spending money on things you don’t really need. So it is not a good idea to shop clothes, shoes, decor and other such with money from a loan or credit. You can buy these things when you can afford them. If you do not have money to spend on them then you should not buy them simply. It is better to then save this money in advance and then buy something than take a loan.
Borrowing money for Christmas is a bit the same, although it is easier to forgive. It is understood that people want a merry Christmas with Christmas presents, spruce, Christmas food and all that and that it can be worth buying even if it involves an extra cost such as loans do. However, I would say that someone who manages their finances responsibly should instead plan for Christmas by saving money in advance.
You know exactly when Christmas is coming and you know it costs money
You often have a pretty good idea of how much it can cost with Christmas celebrations or you can still set up an approximate budget that you try to keep. Then you basically have a whole year to start saving money for Christmas. If you put a little away every month it will not be so dangerous.
When the alternative is to borrow money, there are so many benefits to saving in advance instead. A loan costs extra money in the form of interest. A loan creates uncertainty in the economy and can cause even worse margins. In fact, it can be said that a loan creates exactly the same situation as a saving does during the months when the loan is repaid. The only difference is that you pay in advance with a loan while you pay in advance with a savings plus that you can pay extra money with the loan. In other words, it is so much better and more responsible to save and plan instead of borrowing.