What is an SMS loan?

SMS loan is a form of loan where the borrower can apply for small loans without collateral. In Sweden, sms loans became known as a concept in the mid-2000s when they started marketing the service and the new thing was that they received answers about granted loans directly via sms.

Description of the sms loan service

family loan

2006 was the year when sms loans became a widely known concept in Sweden and the Nordic countries. Similar forms of borrowing have previously existed in both Finland and other countries, but the new thing now was that they were notified via text message. Thus, shorter credits and quick loans were nothing new in themselves.

Thanks to the fast application time and the reply received via sms, the loans became very popular in a short time when they felt modern and right in time.

Sms loans, or quick loans as they are also called, allow you to borrow a small amount of money quickly and easily , for example at the end of the month before the salary comes into the account or for unforeseen expenses.

When the service was still new, you could as a maximum apply for sums up to SEK 5,000 that would be repaid within a month, but now you can have a credit period between 90 days and in some cases up to 5 years!

The name sms loan is really misleading, because it may sound like applying for the loan via sms, but that is not the case. The application is made via the Internet and a regular credit check is done, just as when applying for any other type of loan. The applicant must meet certain criteria such as having fixed income, but there are also operators that offer sms loans without income for borrowers.

The name mainly refers to the fact that SMS is the form of communication channel that the companies use during the process itself to be in contact with the applicant borrower, which makes it all very smooth.

Effective interest rate

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The effective interest rate is the cost of the loan, you can say. The effective interest rate is calculated on an annual basis and is what one pays to the lender in order to take out the loan. The percentages of interest rates vary between different lenders, so it is important to compare the different companies before applying.

However, when it comes to small loans such as sms loans, it is difficult to calculate the effective interest rate, since they are in such a short time. Instead, it is best to focus on the total repayment cost of your loan, and ignore the effective interest rate, which can often show several hundred percent as the loan is at such a small amount over a very short period of time.

Watch out for shady actors

In Sweden, there are between 30 and 40 players offering sms loans or fast loans in some form. Unfortunately, there are always rogue companies that ruin other lenders, and that give the entire industry an undeserved bad reputation. The largest lenders in the industry has therefore started AHYT Association, which acts as a watchdog to ensure a safe business for those borrowers who want to use the service.

What you can think of when applying for sms loans is this

  • Very High Prices – Watch out for companies that have turned up the prices properly on their websites.
  • Permission from Finansinspektionen – By law, a company that deals with credit must have a valid permit from Finansinspektionen in order to conduct its business.
  • Page seems foam – Watch out for warning signs, such as pages that do not work optimally, shut down, or are poorly translated etc.
  • No contact or customer service – Watch out for companies that do not have contact information or a customer service in-house.

Future for sms loans


The future looks bright for this type of loan. It really is a smooth way if you quickly need an extra supplement at the checkout. It may be that you need to borrow money quickly for a holiday, when the washing machine breaks down or to pay a bill that you forgot. No matter what the situation is, you can apply online and usually you get answers very quickly.

Today, even larger sums are offered in the same way, so you are no longer limited to a few thousand dollars. However, always remember to read all the terms carefully and calculate the total repayment cost so that you do not take too large a loan that becomes difficult to repay.