Fast credit and people’s ability to think about finances

When it comes to capitalist societies, the division of labor (which is a feature of many, including non-capitalist societies) is often called for. This, in turn, implies that some people will be educated and understand a lot about finance, while others, though perhaps genius in their field, will not understand anything about finance. From this point of view, the state has a duty to limit potentially dangerous services.

 

Obstacles to borrowing responsibly

borrow money

Here, everyone remembers the “fat years” that showed at all that people cannot and will not borrow wisely. In this case, it was not only individuals who borrowed money, but also bankers who gave loans and tried to live as greenerly as possible, despite the fact that this mess was going to have to blow. For example, around 2007 the share of bad loans in the mortgage sector was around 1%, but in the crisis it was around 8-15%. In a way, the crisis was the result of greed, the irresponsibility of both people and institutions (made up of people).

 

Quick loans

Quick loans

But fast loans … there are a lot of problems with them. What’s interesting is that there are a lot of problems with it, despite the fact that a few years ago everyone had heard about how easy it was to “get in” with all sorts of credit. The public obviously sees fast loans on the internet as a whole different beast than mortgages, but the difference lies in the amount and time, because the underlying principle is always the same – borrow more money.

On a case-by-case basis, the fast credit industry is now pretty sure to limit it to 100 percent a year, except for loans up to $ 70 / $ 99.60, for which interest rates will not be limited. As the amounts above 70 lats / 99.60 dollars will be financially unfeasible (unless the amount of the loans itself goes up), you may think that fast loans can turn into “100 dollars” loans. On the one hand, this is a good thing – fast credit itself is designed to close small cash gaps, and the state is aware of it. On the other hand, hasn’t Latvian society really learned anything from the years of the crisis that the state has to intervene directly in financial transactions? Such an idea is heretical, but this step signals that it is far from the truth.