Internet or online credit is a short-term non-bank loan that you can get online. These credits are more often called quick loans. Non-bank lenders licensed in Latvia have merged with the Latvian Association of Non-Banks Lenders or LNKA. In 2013, the SKDS Research Center conducted a study using data from members of LNKA.
As a result of the research
the amount of loans and the purpose of their use, ie where people use Internet loans, was determined. LNKA members have loans in the following amounts:
- 27% of loans from 0 to 70 EUR
- 24% of loans from 71 to 142 EUR
- 31% of loans from 143 to 285 EUR
- 13% of loans from 286 to 427 EUR
- 4% of loans from 428 to 569 EUR
- 0.9% of loans from 570 to 711 EUR
- 0.1% of the loan from 712 to 1423 EUR
Clients of LNKA members have used loans for the following purposes:
- 2% of respondents find it difficult to tell where they used them
- 2% of respondents used them for other needs not mentioned here
- 2% of respondents used them to make purchases during discounts
- 4% of respondents used them for home improvement
- 6% of the respondents used them for entertainment, travel, holidays, hobbies
- 18% of respondents used them to cover other loans and debts
- 21% of respondents used them for unforeseen costs related to personal transport
- 21% of respondents used them to make utilities
- 21% of respondents used them to make different larger purchases
- 34% of respondents used them for daily spending
As for other research results in the context of loan spending, it turned out that:
- 10% of respondents admit that they can afford to buy some long-term goods, but buying long-term goods such as real estate would be difficult.
- 12% of the respondents are in a particularly bad financial situation, because survival from wage to salary is a big problem.
- 30% of respondents have enough money to buy food only, but the purchase of clothing or other primary needs is already a financial difficulty.
- 43% of respondents have enough money for everyday goods such as food or clothing, but they are not enough for long-term goods.
As we conclude, loans are not taken in excessive amounts and only in situations where it is really needed, such as the results of the study, to cover daily spending.