Debt Enforcement Agency concerned over rise in unsecured loans
An increasing number of Swedes are applying for loans that do not require any collateral security, so-called unsecured loans. This development has the National Debt Enforcement Agency, Kronofogden, worried over rising household debt.
Last year, Swedish households borrowed a total of SEK 205 billion in unsecured loans, according to figures from Statistics Sweden. These loans are mostly used to finance things like renovations, weddings, new cars and furniture, according to a survey by loan broker Zmarta Group.
The CEO of the company, Björn Lander, tells Swedish Radio News that he believes that Swedes are more inclined to borrow money now than five years ago.
"I think it's become more socially acceptable in Sweden to borrow money for private consumption compared to five years ago," Lander says.
Tina Häggmark, spokesperson at the Debt Enforcement Agency, agrees but is less thrilled about the trend.
"It's very easy to purchase things for money that you don't have these days, and that means that there's a risk that household debt will increase and that people can't afford to pay off these loans," Häggmark says.
Björn Lander, however, points out that these loans only account for less than 7 percent of all household debt in Sweden and claims that almost all of them are paid off.
Men are more likely to apply for unsecured loans than women and the average amount is roughly SEK 85,000.