SwedenLivingWorld world_2_fill WorldBusiness BusinessSports sports-soccer SportsEntertainmentEntertain

The Government Wants a Lower Maximum Interest Rate on Loans

The Swedes' debts are at historically high levels. Now the government is proposing several tightening measures to stop bad credit lending and "predatory lending" to vulnerable individuals. I can understand if one thinks we're being tough, says Financial Markets Minister Niklas Wykman (The Moderate Party).

» Updated: 19 September 2024, 07:00

» Published: 30 August 2024

The Government Wants a Lower Maximum Interest Rate on Loans
Photo: Jonas Ekströmer/TT

It must become less attractive both to take out and above all to grant bad loans. This is what the government thinks, which is now presenting four new legislative proposals.

Niklas Wykman claims that these are tough measures to protect the country's consumers.

Now we're hitting the brakes and we're hitting them hard, he says at a press conference.

Lower interest rate ceiling

The government proposes that the interest rate ceiling be lowered from 40 percentage points to 20 above the reference rate.

This will be a halving of the maximum interest rate that can be charged on this type of credit, notes Wykman.

In addition, a cost ceiling is proposed, which means that the costs of the loan may not exceed the original loan amount.

This sets a limit on how expensive it can be to have this type of loan, or how profitable it can be to grant this type of loan, says Wykman.

The government also wants to ban companies from extending credits more than once if it incurs a cost for the borrower.

Another proposal is that those who market loans must be clearer about what it costs and the risks of debt.

The proposals are being presented in a referral to the Council on Legislation, which will now be sent to the Council on Legislation.

More may be needed

What do you think the measures will have for an effect?

They are collectively aimed at strengthening the position of consumers. One should not be affected by very high interest rates, says Wykman.

This is very much about pointing out those who are responsible for irresponsible lending and then taking measures that strengthen consumers in relation to them.

He does not rule out that more may be needed.

New figures showed earlier in the week that more and more Swedes are having trouble paying their bills on time. The number of new debt collection claims is increasing and is at record levels. Even the debts with the Enforcement Authority are increasing. In just two years, the debt amount has increased by 70 percent.

The measures are proposed to come into force on March 1, 2025.

Tags
TTT
By TTThis article has been altered and translated by Sweden Herald

More news

Took a tough stance on crypto companies - resigns
1 MIN READ

Took a tough stance on crypto companies - resigns

Ingvar Carlsson on PG: "A very loyal friend"
2 MIN READ

Ingvar Carlsson on PG: "A very loyal friend"

No Wage Guarantee in American Process
1 MIN READ

No Wage Guarantee in American Process

He became "PG" to the entire Swedish people
3 MIN READ

He became "PG" to the entire Swedish people

PG Gyllenhammar has died: "meant a lot"
1 MIN READ

PG Gyllenhammar has died: "meant a lot"

Unstable US stock market ends on a plus
1 MIN READ

Unstable US stock market ends on a plus

Temu's owner shows its hand
1 MIN READ

Temu's owner shows its hand

Nvidia rises in pre-trading on Wall Street
1 MIN READ

Nvidia rises in pre-trading on Wall Street

Reconstruction in the USA to save Northvolt
3 MIN READ

Reconstruction in the USA to save Northvolt

Northvolt: Negotiations are still ongoing
3 MIN READ

Northvolt: Negotiations are still ongoing

Higher Compensation for Job Interviews in Another Location
1 MIN READ

Higher Compensation for Job Interviews in Another Location

Vehicle Giant Warns of Challenges in 2025
1 MIN READ

Vehicle Giant Warns of Challenges in 2025

Unchanged interest rate in Turkey
1 MIN READ

Unchanged interest rate in Turkey

Trump anxiety in the EU over US tariffs
3 MIN READ

Trump anxiety in the EU over US tariffs

Weak demand for scrapping premium
1 MIN READ

Weak demand for scrapping premium

E-fuel company takes in half a billion
1 MIN READ

E-fuel company takes in half a billion

New Report Boost for AI Giant Nvidia's Share
2 MIN READ

New Report Boost for AI Giant Nvidia's Share

Stockholm Stock Exchange Turned Upwards
1 MIN READ

Stockholm Stock Exchange Turned Upwards

Bitcoin closer to the dream limit
1 MIN READ

Bitcoin closer to the dream limit

Higher fee to stop burning of plastic
2 MIN READ

Higher fee to stop burning of plastic