Foreign online banks now offer what are called ‘express loans’ in the Norwegian market, loans with annual interest rates exceeding 1,000%.
Jorge Jensen, CFO of Finance, wants a limit to how much banks can take in interest and fees, reported NRK news.
‘In the more extreme cases, with short repayment times and low loan amounts, you get up to an almost 1,000% effective interest rate,’ said Jensen.
It is especially the fees that can make these loans expensive.
Finance Minister Siv Jensen of Fremskrittsparti (Frp) will examine the proposal, but said that it is not easy to set an interest rate ceiling.
An interest rate can have unintended effects. In the government platform, we have said that we will look at other measures to tighten this further,’ said Jensen.
Parliamentary representative, Karin Andersen of the Sosialistisk Venstreparti (SV) believes Norway must do as 14 other European countries have done and tackle interest rates.
Together with the party leader, Audun Lysbakken, she has presented proposals for interest rate ceilings, and other necessary measures, to prevent people from falling into excess debt burdens.
‘It must be stopped. If you are insecure, the creditor must take greater responsibility
and limit interest rates,’ she told NTB news.
The roof must be high
CEO, Robert Berg, of the consumer bank, ‘Instabank’ believes the idea of an interest rate ceiling is good.
‘But the roof must be high, otherwise the foundation for doing business will disappear,’ he said.
He pointed out that in Sweden, a ceiling of 40% effective interest rate that may be
introduced during this year is being discussed. Finland already has a 50% effective interest rate ceiling.
© NTB Scanpix / Norway Today