Technology has made things much simpler and quicker for the majority of the world. everything from having the right apps on your computer to linking them to your mobile phones and more is readily available to those in the know. This notion of harnessing various aspects that can make our lives easier, as consumers, is also something that various industries and sectors have grabbed a hold of.
Companies including financial institutions have devised solutions to help us in our daily lives, and one of these is the Sms Lån concept. If you are one of those people who didn’t know about this or have heard of it, but are not sure what it is, the below quick guide can help you understand it better.
How Is Interest Calculated?
It is good to have a brief understanding of how interest is accrued on these types of solutions. Sometimes if you don’t check properly it can be very expensive in the long run and you end up in more debt than you started with. Further information can also be found here: https://www.moneyhelper.org.uk/en/savings/how-to-save/interest-rates-explained
It depends on the amount borrowed and the percentage. Regular consumer loans can differ in these two aspects but the simplest way to look at them is, by the examples below:
In kroners, if for instance, you borrow 6000, over 2 months, with an effective interest rate of 32.4%, you will be paying about 717 on top.
In another example, if you borrow 20 000 kroner, for instance, over the time of 12 months, your rate would be about 87% and you will pay back only 3523 on top.
As you can see from the above, the rates are higher for the least amount of money you borrow, so think about this it may be the case where you would rather borrow more than you need so you don’t accrue a high effective rate.
The actual amount of the loan is usually static and will not change unless you borrow more. But because interest is calculated annually in most banks and financial institutions, it can easily change and could be more or less.
A Brief Introduction to Sms Lån
Some services naturally migrate to phone services, making them easier and accessible to the majority of the public. When the era of digitization set off, mobile phones were the first platform to accomplish this task. Now, submitting a loan application via the palm of your hand using a phone is as simple as completing a few details and sending it, which could take inside of a minute.
Chances are the banks or institutions will also evaluate your application in just as little a time. A couple of years ago, banks started to advertise the concept of the sms loan application and many people weren’t sure if this was a gimmick or a real service.
The basic idea behind it was to send your loan application via your smartphone, using text or sms services and you would more than likely receive your borrowed money within minutes, however, this was only for small loans of around a few thousand kroner.
To those who were skeptical, there was good reason for it, as the actual process involved sending the text message and receiving a contract form to sign which would then be sent via email to the banks. However, there is no doubt that this is still a much more convenient way of doing it than having to visit the places.
To further enhance the user experience, banks have now simplified this even further where you only need to send that SMS and nothing else. This is because the form is also available on the phone, to fill out.
Today’s simplified form on the bank’s website is no more time-consuming than sending an SMS. You also have the form for the bank available on your mobile phone. Thus, making it an even better on-the-go option for many.
The only thing it takes is registering yourself on their platform or with the lender and once your information has been added to the database, the only additional information you will need to send, will be at the time of your requirement for a loan, and these are the correctly formatted text messages along with the information on how long you want the loan for a how much.
On the side of the bank or lender, they will receive an alert to tell them someone has applied for a loan, and they will do some quick checks using your information, once everything checks out, this application is approved and the money is sent into your bank account immediately.
This would be the typical scenario for many European countries, and in Norway, it is not much different however there are one or two things you should be made aware of. The application for the loan is not necessarily being done via your mobile but it is still a simplified one.
The checks also involve your credit score, and especially in the case of a consumer loan, the higher your score the better the interest rate will be on your borrowed money, and vice versa, if your score is bad then you will be paying a higher interest rate. This aspect, along with the requirement for you to be able to pay back the funds, is what’s important to banks and lending companies. Paying back the borrowed money as well as the interest rate can be done in installments.
Just as much as you need to provide your information to them, the brokers, lenders, or banks are also obliged to provide all the relevant real-time information regarding the loans they offer, their prices, and rates to the public, when they advertise their sms lån services.
The Norwegian Consumer Agency still has to approve all establishments in this modern endeavor, so suffice to say, make sure you do your homework before you send that text message to any advertisement, otherwise you may be doing it at your own risk.