Law amendment didn’t decrease interest rates of SMS-loans
04.05.2009, 14:35 Although law amendment should have
decreased interest rates of SMS-loans, but according to kiirlaen.info the rates
have stayed the same, Postimees reports.
The law amendment considers more than tripled Estonian central bank’s basic
interest to be in contradiction with good practices and therefore void.
Currently the tripled interest rate is 108 pct a year. The interest rate of
short-term fast loans and SMS-loans is often more than 500 pct.
Taking a loan with 500 pct annual interest isn’t restricted, but the law
considers it to be in contradiction with good practice and assumes that the loan
giver is taking advantage of borrowers’ inexperience, dependence relations or
extraordinary condition.
That means that is the annual interest is exceeding Estonian central bank’s
tripled annual interest rates, the borrowers may waive interest payments after
taking the loan and pay only basic interest, which currently is 2.5
pct.