Saturday June 25, 2022

Private debt has increased steadily throughout the years in Finland

Published : 03 Jan 2022, 15:25

Updated : 03 Jan 2022, 15:35

  By Bazoom Group

Economics and finances are always changing. Therefore, it can be a bit difficult to keep up with all switches and turns. This still doesn’t mean that you shouldn’t try. Even if you don’t know too much about economics, and lack the knowledge of some terms, it is still crucial to follow economics, especially in your home country.

Economics and finances affect all working adults, which is why they are so important. Many people find these two subjects a bit dry, which makes following them even more hard. Therefore, we have created this article. We will tackle one of the very important subjects in the world of economics: private debt. More than that, we will focus on private debt in Finland since that is the most important for Finns.

What is Private debt?

To start, we need to define the term Private Debt. Obviously, many people are already familiar with this term, but not everyone is. Very simply put, private debt means a debt that is formed from loans taken by households, businesses, or non-profits. Private debt is often compared to public debt, which is money owed by national, state, and local governments.

For example, if you take a loan, the debt from this loan is private. The same goes if a company takes a loan to expand. Public debt on the other hand can be caused by your hometown’s loan as an example. If you read statistics about private debt, you can see all the private debts owed at that moment.

Why has private debt increased in Finland?

The amount of debt reached an all-time high in Finland in 2020. As the year 2021 comes soon to its end, we will find out whether the private debt increased even more. It is very unlikely that it would have decreased significantly.

But why has it risen so much? For this, there are many different reasons. People take private loans for a variety of reasons, which we will focus more on later. The whole process of applying for loans has become much easier. People can find loans easily just by using the internet. For example, if you read more here, you can find a lot of great loan providers easily.

Also, people have become more knowledgeable about finances, and many are looking for financial freedom. People might take loans easily, and plan to invest some of them to make a profit. This is an increasing trend among students, who have found this way to make some extra money with the help of a student loan.

For what purposes do Finns take loans?

As we mentioned, people take loans for many different reasons. It is very common to apply for a loan at least once throughout your life. In Finland specifically, there are a couple of types of loans that have become very common to take.

In 2021 more people applied for housing loans. Many Finns are buying apartments, and for this most of us need financial help. This is not the only common reason to take loans. Many students in Finland apply for a student loan because it is one of the cheapest loans to take. It has a very low-interest rate when compared to any other loan.

Use the internet to find the best loan for your needs

The internet has clearly had an impact on increased private debt in Finland. Before people would need to arrange a meeting with a bank to be able to even start the application process. This is not needed anymore.

When you are looking for a loan, you can start and end the process online. You can compare different loan providers very easily, so you can find the best option for you. This way you can be sure that you will get the possible deal when you are applying to get a private loan.