Quick payday loan is the most transparent type of loan that has become more reliable lately. At the beginning of 2012, when the EU Consumer Protection Center completed its inspection, information gaps on the websites of nine of Latvia’s largest creditors were also remedied. This and other steps in the direction of consumer protection show that fast loan from “doubtful cantor” credit has become a type of credit that lenders can trust.
Trends in fast loans in recent years
The short-term loan market has emerged from the financial crisis relatively intact, ie most of these companies were operating at a loss but did not go bankrupt. However, the real “crisis”, at least for the smallest lenders, began in October 2011, when the rules for obtaining a non-bank creditors license came into force – 50,000 dollars alone and 10,000 dollars for re-registration. As a result of the law, the majority of non-bank creditors went bankrupt, some were forced to merge, and some that were already “major players” continued to operate.
A new development is the formation of associations, which is a very rare event in Latvia. In 2011, the Latvian Association of Fast Credit Lenders (LAKDA) was established, which represents the interests of lenders within and outside government institutions and develops the principles by which the Association’s companies treat their clients. According to LAKDA, at the end of 2011 there were 41 fast credit providers in Latvia; 11 of them are members of LAKDA, which shows that the association is popular among lenders and may also have the capacity to act.
For the average consumer, the gradual move towards a more orderly industry is very beneficial. The main benefits for consumers are:
- Clear, transparent loan terms;
- Information materials (booklets, websites, advertisements) do not provide misleading information about fast loans;
- A more civilized attitude towards customers is expected from companies (membership in the association both prevents unfair competition and requires additional customer liability);
- Offers remain more attractive as competition becomes fiercer as the market becomes denser.
Fast and transparent loans – apply for a quick payday loan now
We found out in the article that there are several positive trends in the fast credit industry, and state and EU intervention, albeit undesirable from a corporate point of view, has made quick payday loans more beneficial to borrowers. In contrast, license re-registration fees further intensify competition by significantly lowering companies’ net profits, by forcing companies to look for new customers more actively (and by reducing the cost of borrowing and interest).
Quick lenders are no longer the fruitful grown-ups who have come up with the idea of legalizing their business. Lenders are now mostly reputable companies with significant turnover, companies that pay attention to their reputation and treat their customers fairly, even if they themselves are honest.