One in Four Over-Indebted Finns Uses Payday Loans for Gambling
A recent survey by Takaisinperintä has revealed a troubling trend among over-indebted Finns. According to the findings, one in four heavily indebted individuals has taken out a payday loan to fund gambling activities.
Payday Loans for Everyday Crises and Gambling
The survey gathered responses from 765 heavily indebted individuals who used Takaisinperintä’s services, which aim to help out clients that have fallen into debt due to payday loans. In Finland, an estimated 300,000 people are over-indebted because of such loans. Annually, nearly one in ten citizens end up facing enforcement proceedings.
The survey results reveal that a significant portion of those surveyed, 28%, used payday loans specifically for gambling or betting. This raises concerns about the role gambling plays in contributing to the financial struggles of many individuals. While many borrowers attempt to address immediate financial crises, gambling can exacerbate their debts, creating a cycle that is difficult to break.
The Cycle of Debt and Borrowing from Friends and Family
Life events like health issues, divorce, addiction, and unemployment often trigger spirals of debt. Thirty-two percent of respondents cited gambling addiciton as a key factor. In Finland, the minimum payday loan amount is €2,000. For one-third of respondents, the largest loan taken was between €2,000 and €3,000.
Olli-Matti Korhonen, CEO of Takaisinperintä, pointed out that while legislation exists, enforcement remains inadequate:
“The biggest issues we see are unreasonable interest rates, unclear terms, and failure to properly assess creditworthiness.”
One of the most concerning findings was that many individuals resort to taking out additional payday loans to cover previous ones. Approximately 65% of respondents admitted they had taken out another payday loan to pay off an earlier one. This practice deepens the cycle of debt, making it harder for individuals to escape the trap of high-interest borrowing. Additionally, 25% had borrowed money from family or friends to cover their payday loan debt.
