Growing Debt in Nordic Countries from Payday Loans

You might have heard about payday loans from seeing advertising on TV or online. These types of loans are becoming a worldwide phenomenon and most recently, it has started to become prolific in Nordic countries.

Since the countries in this region have very low public debt and AAA debt ratings, the cost of borrowing is low in these countries. For example, Norway has a sovereign wealth fund which holds $820 billion, meaning the country has zero net debt.

This low cost of finance has led to an explosion in consumer debt, such as pay day loans.

What are Payday loans?

Payday loans are a type of short term loan, that is secured by the borrowers pay check and charges a very high interest rate. The borrower typically pays back the loan on the next pay date, but the amount can be refinanced for another period by paying a fee.

The appeal of these payday loans is that money can be loaned fast, and the credit check requirements are lax. This has made payday loans popular with individuals who have bad credit or lower income and are unable to access other forms of borrowing, such as credit cards.

The Problem with Payday loans

The lenders associated with payday loans have gained a bad reputation for lending practices which could be considered predatory. Often they are targeted towards individuals who are low income and have bad credit. The terms of the loan aren’t made clear, and the interest rates when annualized can be as high as 900%.  According to a Swedish website that compares payday loans, there are a list of loan companies that offer interest free payday loans, but if not paid back within the given time frame, a very high interest rate will apply instead.

As a result, these loans are never fully paid back and these individuals are stuck in a debt trap of paying monthly fees.

Growing Debt in Nordic Countries

The debt numbers have exploded in Nordic countries over the past few years. In particular, Sweden had the number of payday loan companies more than double within 5 years. According the Swedish FSA, the number of payday loan companies in 2006 was 95. Five years later it was 277!

Also, another alarming statistic is the number of payday loans that are not repaid. From 2011 to 2012 the amount of unpaid payday loans increased by 62 percent.

In fact, the amount of personal debt across Nordic countries is some of the highest in the world. According to OECD statistics from 2013, the amount of personal debt that households in Denmark hold is 320% of their income. In the Netherlands, households have personal debt that is 290% of their household income. Norway have personal debt levels which are 215% of household income.

By comparison, the US have personal debt levels that are 111% of household income.

What Should Be Done About Payday Loans

The lax oversight should be replaced with more stringent regulation. The Swedish FSA has indicated that they will make it harder for these companies to be established, and licenses and be revoked if they do not follow regulations.

As a consumer, you can avoid this type of finance completely. If you are an individual with good credit, there are better ways to obtain financing if you need it.

 

 

5 Unusual Types of Dating Culture Around the World

You have probably heard the saying, ‘love is a universal language, understood by all.’

While I agree with this saying, I recently heard about the differences with dating culture around the world. I thought it would be interesting to explore the unusual differences.

When you think of dating, most of us think of a guy approaching a girl, and asking her out on a date. However, there are many different and unusual types of dating customs abroad.

Here are some of the more interesting dating customs:

Japan

Valentine’s day in Japan is a little different. Girls are the ones that have to buy chocolate for the guy that they fancy. And guess what? They receive nothing in return!

A month later, however, the guys are supposed to return the favor if their feelings are mutual on a holiday called “White day”. The twist is that the men are expected to spend double the amount the ladies do on Valentine’s day. Not a bad deal, if you are a lady of course!

South Korea

In South Korea, dating doesn’t start until college and since most children live with their parents until they are married, love hotels are common if couples need some privacy.

Something I found interesting, is that when Korean guys are courting girls they effectively become their ‘servants’. They will hold her handbags, carry her shopping bags, and do anything to make his girl happy.

Things reverse when they get married, however. The lady takes on a traditional role and is expected to look after the home and family.

The Netherlands

While other countries have set rules and customs when it comes to dating, the Netherlands is one place where few rules exist!

It doesn’t matter who makes the first move in Amsterdam, whether it is the guy or girl. Also, when it comes to the first date, all the conventional rules can be thrown out the window!

For this reason, some people might view Amsterdam as an attractive place to visit.

Brazil

In Brazil, men can come across as forward and aggressive if you aren’t accustomed to the culture. Kissing on the first date is common, and seen as a way of getting to know each other.

Dating progresses quickly in Brazil, with guys and girls becoming ‘official’ within days. This is because it is seen as unusual if you aren’t in a relationship. Brazilian women are known for their beauty. There are even complete websites made on how to meet Brazilian women.

Italy

When it comes to dating, Italians are very traditional. Men are drawn to physical attractiveness, beauty, and homemakers. Women want men who can provide financial stability. Also, looks are high on the list of importance to both men and women.

If a woman expresses serious interest in a guy, it’s not uncommon for her parents to do a thorough background check on the guy.

The mother-son relationship is strong with Italian guys, so the girl must win over his mother in order to be accepted.

Isn’t it interesting to see the differences in dating cultures around the world? But like my opening line says, “love is a universal language” and despite the differences in dating culture, it can be understood by all.