I have seen loan advertisements everywhere in Budapest lately. Especially television advertisements annoy me. The show a man who is sad because he cannot buy a new microwave oven, car or holiday for the family. But then the loan fairy comes and gives him bunch of 20 000 Forint notes. Just call this number and you too can become rich.

Wrong. The yearly interest (THM) is mentioned in the advertisements and it is from 200% to over 400%. Almost free money, right? If you are mathematically illiterate you do not see how much such loans cost you. A loan of 100 000 HUF for three months, so in 200% case you would pay 50 000 HUF extra. Pretty insane.

I have read that in Finland these quick loans are the last action to push a person in a economical catastrophe. Sometimes they are used to cover payments of bills or other loan. They are the last possible loan to get because all other sources are used already. A person who has already plenty of problems with money can mess up his finances for good with such loan.

But some people will always find ways to end up in a trouble and without money. No matter if such loans exists or not.