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Home » Fi­nan­cial and debt coun­sell­ing » Getting out of debt » Payday loans

Payday loans

Payday (i.e., instant) loans refer to consumer credits often with high interest rates.

Marketing for payday loans is often aggressive and emotionally engaging. Credits like these are quick and easy to receive, but repaying them may be difficult due to high interest rates and charges. It is very important to carefully study the credit terms and conditions before signing any credit or loan agreement.

Efforts have been made to cap the interest rates of consumer credits by amending legislation:

  • Since 1 October 2023, the interest rate on consumer credit may not exceed 15% of the interest rate plus the reference rate according to section 12 of the Interest Act. The interest rate on credit must not exceed 20%. 
  • For the period 1 September 2019–-30 September 2023, it was possible to agree on an interest rate for credit of up to 20%. 
  • For credit agreements for the period 1 June 2013–31 August 2019, the law limited the annual percentage rate (APR) for credit. The APR may not exceed the reference rate plus 50 percentage points if the amount of credit is less than EUR 2,000. This interest cap does not apply to loans of EUR 2,000 or more loans that can only be used to pay for goods or services. 
  • Temporary changes in the law concerning the maximum interest rates for the periods 1 July–31 December 2020 (in Finnish) and 1 January–30 September 2021 (in Finnish) on the Ministry of Justice’s website. 

Know your credits

  • Find out the conditions of your credit in the Positive credit register. What are the interest terms, APR, repayment period and other costs of the loan. 
  • Take a look at your invoices. Are you paying off the principal or are most of your repayments on interest and charges? What is the repayment schedule for your credit? What are the total costs that you will have to pay over the repayment period? The smaller the monthly payment, the longer the repayment schedule.

How to get help with payday loans

  • You can try to negotiate with the lender on lowering the interest rate, charges or payment instalment.
  • If your credit has unjustified or unreasonable credit costs, you can ask for them to be reduced or even completely eliminated. See the Finnish Competition and Consumer Authority’s guidelines. 
  • Once the credit has become due for payment, the creditor may charge you the interest rate specified in the credit agreement as the late-payment interest for 180 days. After that, you will have to pay the general late-payment interest, which is approximately 7%, on the unpaid amounts.
  • If you are unable to pay the amounts you owe, you can contact the creditor and request for the amounts to be transferred to debt collection. Debt collection takes place under a district court judgment in an enforcement process. Requesting this may help you save debt collection costs. Read more about the debt collection process.
  • To improve your financial situation, you often need to take into account a variety of factors. Take a look at the page ‘Financial self-help‘ for more information about the options available for you to improve your financial situation.