In the News: Young Swedes trapped by SMS loan debt

Fire off a simple text message, wait 15 minutes and presto, 3000 kronor ($500) land in your account; the simplicity of obtaining SMS loans in Sweden is increasingly luring youths into debt.

A SMS loan, or a text message loan, is a small credit loan which can be applied via a SMS message with your personal and bank account details. Some SMS companies have claimed in their advertising that it takes only fifteen minutes for a customer to receive a loan.

The number of text message loans has soared in Sweden since it’s first introduction in 2006. Young swedes aged between 18-25 account for 36% of all the loan users. Getting approval of the loans are pretty easy, but the fee and interests involved are extremely high. Most young people belong to the low and non-income group, if the loans are not repaid in time, borrowers are “trapped” in a vicious debt circle and are in many cases forced to take new loans to repay the old debts.

Check out the full story by The Local.