{"id":18610,"date":"2025-05-13T12:39:56","date_gmt":"2025-05-13T10:39:56","guid":{"rendered":"https:\/\/moneyhub.ee\/?p=18610"},"modified":"2025-05-13T12:42:35","modified_gmt":"2025-05-13T10:42:35","slug":"quick-loan-market-in-turmoil","status":"publish","type":"post","link":"https:\/\/moneyhub.ee\/en\/useful\/articles\/quick-loan-market-in-turmoil\/","title":{"rendered":"Estonian quick loan market in turmoil \u2013 payment orders vs. debt collection proceedings"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"18610\" class=\"elementor elementor-18610\" data-elementor-post-type=\"post\">\n\t\t\t\t<div class=\"elementor-element elementor-element-5d7efb58 e-flex e-con-boxed e-con e-parent\" data-id=\"5d7efb58\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-32d40bf6 elementor-widget elementor-widget-shortcode\" data-id=\"32d40bf6\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"shortcode.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-shortcode\"><nav aria-label=\"breadcrumbs\" class=\"rank-math-breadcrumb\"><p><\/p><\/nav><\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-1e4750ba e-flex e-con-boxed e-con e-parent\" data-id=\"1e4750ba\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t<div class=\"elementor-element elementor-element-a047e75 ddddf e-flex e-con-boxed e-con e-child\" data-id=\"a047e75\" data-element_type=\"container\" data-e-type=\"container\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-20c9d99a elementor-widget elementor-widget-heading\" data-id=\"20c9d99a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">The Estonian quick loan market is in turmoil.<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-18b94166 e-flex e-con-boxed e-con e-parent\" data-id=\"18b94166\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-13e8adb2 elementor-widget elementor-widget-image\" data-id=\"13e8adb2\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"1280\" height=\"853\" src=\"https:\/\/moneyhub.ee\/wp-content\/uploads\/2025\/05\/wallet-3548021_1280.jpg\" class=\"attachment-full size-full wp-image-18611\" alt=\"makseh\u00e4ired\" srcset=\"https:\/\/moneyhub.ee\/wp-content\/uploads\/2025\/05\/wallet-3548021_1280.jpg 1280w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2025\/05\/wallet-3548021_1280-300x200.jpg 300w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2025\/05\/wallet-3548021_1280-1024x682.jpg 1024w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2025\/05\/wallet-3548021_1280-768x512.jpg 768w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-19d502c4 e-flex e-con-boxed e-con e-parent\" data-id=\"19d502c4\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-175f64b5 elementor-widget elementor-widget-text-editor\" data-id=\"175f64b5\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h1><span style=\"font-weight: 400;\">Estonian quick loan market in turmoil \u2013 payment orders vs. debt collection proceedings<\/span><\/h1>\n<h1>\u00a0<\/h1>\n<p><span style=\"font-weight: 400;\">Courts have suspended processing payment orders for quick loan debtors, which could destroy the business model of quick loan companies and create a huge amount of additional work for debt collection agencies.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The problem is that <\/span><a href=\"https:\/\/moneyhub.ee\/en\/money\/short-term-loans\/\"><span style=\"font-weight: 400;\">quick loan companies<\/span><\/a><span style=\"font-weight: 400;\"> often grant loans irresponsibly without checking their customers&#8217; actual solvency. They frequently limit themselves to checking with the tax and customs authorities without investigating the customer&#8217;s expenses. As a result, loans are also issued to people who are clearly unable to repay them.\u00a0<\/span><\/p>\n<ul>\n<li aria-level=\"1\"><b>Around 10% of the working-age population is estimated to <\/b><a href=\"https:\/\/moneyhub.ee\/en\/useful\/articles\/how-debt-impacts-relationships\/\"><b>struggle with debt<\/b><\/a><b>, with many having several or dozens of loans.<\/b><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">For quick loan companies, limiting payment orders could mean the end of their business, as they may not receive interest in court proceedings, only the principal amount. Court proceedings often reveal that the claims are unfounded, as responsible lending principles were not followed when the loans were issued.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">At the same time, restricting payment orders makes debt proceedings more expensive\u2014the costs of legal proceedings are up to 20 times higher for the debtor and prolong them for years!<\/span><\/p>\n<h1>\u00a0<\/h1>\n<h2><span style=\"font-weight: 400;\">Types of payment orders in Estonia<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">In Estonia, payment orders and court proceedings are distinguished as civil proceedings with different objectives, procedures, and application areas. Here are the main differences between them:<\/span><\/p>\n<h3><b>1. Payment order<\/b><\/h3>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Definition<\/b><span style=\"font-weight: 400;\">: A payment order is a simplified procedure for collecting smaller, clearer, uncontested monetary claims (e.g., <\/span><a href=\"https:\/\/moneyhub.ee\/en\/useful\/articles\/manage-personal-debt\/\"><span style=\"font-weight: 400;\">debts and unpaid bills<\/span><\/a><span style=\"font-weight: 400;\">).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Purpose<\/b><span style=\"font-weight: 400;\">: A quick, cost-effective solution that does not require full court proceedings.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Procedure<\/b><span style=\"font-weight: 400;\">:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The claimant submits an application to the court (e.g. via e-file) setting out the grounds for the claim and providing evidence (e.g. contract, invoice).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The court examines the application without notifying the defendant and may issue a payment order without a hearing.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">If the defendant does not contest the payment order within 15 days, it becomes enforceable (similar to a court judgment).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">If the defendant contests the claim, the case may proceed to court proceedings.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Conditions<\/b><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The claim must be monetary, usually up to \u20ac6,400 (simplified procedure limit).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The claim must be clear and proven (uncontested).<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Advantages<\/b><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Faster (usually within a few weeks).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Cheaper (lower court fees).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Less formal.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Disadvantages<\/b><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Only suitable for uncontested claims.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">If the defendant contests the claim, the procedure becomes a court proceeding.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h1>\u00a0<\/h1>\n<h3><b>2. Court proceeding<\/b><\/h3>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Definition<\/b><span style=\"font-weight: 400;\">: Action proceedings are full court proceedings used to resolve disputes where the parties cannot reach an agreement (e.g., complex contract disputes, claims for damages, division of property).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Purpose<\/b><span style=\"font-weight: 400;\">: Thorough and fair resolution of disputes through the courts.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Procedure<\/b><span style=\"font-weight: 400;\">:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The plaintiff files a claim with the court, setting out their claims, arguments, and evidence.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The court notifies the defendant, who can file a response.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Court hearings are held, where the parties present their arguments, witnesses, and evidence.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The court issues a decision, which may be enforceable.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Conditions<\/b><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Suitable for all types of civil disputes, including non-pecuniary claims (e.g., contract cancellation, protection of honour).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">No limit on the amount of the claim.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Advantages<\/b><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Allows for a thorough examination of the dispute.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Suitable for more complex and contested cases.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Disadvantages<\/b><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Slower (may take months or years).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">More expensive (higher court fees and possible legal fees).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">More formalities and procedural requirements.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h1>\u00a0<\/h1>\n<h2><span style=\"font-weight: 400;\">Lenders may end up without interest<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Jonna Pechter, CEO of Bigbank,<\/span><a href=\"https:\/\/news.err.ee\/1609689962\/suspension-of-payment-order-processing-challenges-quick-loan-business-model\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\"> stated that the reform will unlikely affect banks<\/span><\/a><span style=\"font-weight: 400;\">, as their lending processes involve more rigorous checks. However, some credit providers operate without requesting documentation, appealing to consumers through convenience.<\/span><\/p>\n<h1>\u00a0<\/h1>\n<p><span style=\"font-weight: 400;\">A Ministry of Finance partner has proposed several frameworks for the planned loan register. \u201cThey just perform a registry check and issue the loan,\u201d Pechter explained. \u201cIf this is how small loans are granted, that model may no longer be viable.\u201d<\/span><\/p>\n<h1>\u00a0<\/h1>\n<p><span style=\"font-weight: 400;\">She suggested many <\/span><a href=\"https:\/\/moneyhub.ee\/en\/money\/short-term-loans\/\"><span style=\"font-weight: 400;\">quick loans<\/span><\/a><span style=\"font-weight: 400;\"> could be legally contested, with lenders recovering only the principal, not the interest, during litigation. While this would notably affect the short-term loan sector, it would have little influence on banks, given their limited exposure to that market.<\/span><\/p>\n<h1>\u00a0<\/h1>\n<p><span style=\"font-weight: 400;\">Pechter acknowledged that while some users of fast loans might qualify for bank credit, many likely would not. \u201cThere\u2019s also a large portion who\u2019ve been rejected by banks,\u201d she added.<\/span><\/p>\n<h1>\u00a0<\/h1>\n<h2><span style=\"font-weight: 400;\">Collection agencies to feel the impact<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Argo Virkebau, CEO of Aktiva Finance Group, which owns <\/span><a href=\"https:\/\/julianus.ee\/en\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Julius Inkasso<\/span><\/a><span style=\"font-weight: 400;\">, warned that ending automated systems would raise debt collection costs for agencies and borrowers. He criticised the restriction on payment orders, noting that lawsuits are significantly more expensive for debtors.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cThe debt remains. I don\u2019t see how this is fair,\u201d he said, rejecting claims that agencies overcharge. He stressed that overall costs tend to align between payment orders and lawsuits.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Virkebau agreed that responsible lending must be enforced, but highlighted that over-complication increases the debtor burden. \u201cWhen everything must be done manually, costs skyrocket,\u201d he warned.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">He supported government efforts to promote accountability in lending. Still, he cautioned that the reform could result in years of delays and a tenfold workload, forcing collection agencies to recruit more staff.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-adf47ca e-flex e-con-boxed e-con e-child\" data-id=\"adf47ca\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Courts have suspended processing payment orders for quick loan debtors, which could destroy the business model of quick loan companies and create a huge amount of additional work for debt collection agencies.<\/p>\n","protected":false},"author":7214,"featured_media":18611,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-18610","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles"],"acf":[],"blog_post_layout_featured_media_urls":{"thumbnail":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2025\/05\/wallet-3548021_1280-150x150.jpg",150,150,true],"full":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2025\/05\/wallet-3548021_1280.jpg",1280,853,false]},"categories_names":{"21":{"name":"Articles","link":"https:\/\/moneyhub.ee\/en\/category\/useful\/articles\/"}},"tags_names":[],"comments_number":"0","rttpg_featured_image_url":{"full":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2025\/05\/wallet-3548021_1280.jpg",1280,853,false],"landscape":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2025\/05\/wallet-3548021_1280.jpg",1280,853,false],"portraits":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2025\/05\/wallet-3548021_1280.jpg",1280,853,false],"thumbnail":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2025\/05\/wallet-3548021_1280-150x150.jpg",150,150,true],"medium":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2025\/05\/wallet-3548021_1280-300x200.jpg",300,200,true],"large":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2025\/05\/wallet-3548021_1280-1024x682.jpg",800,533,true],"1536x1536":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2025\/05\/wallet-3548021_1280.jpg",1280,853,false],"2048x2048":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2025\/05\/wallet-3548021_1280.jpg",1280,853,false]},"rttpg_author":{"display_name":"Siiri Kullerkupp","author_link":"https:\/\/moneyhub.ee\/en\/author\/siirikullerkupp\/"},"rttpg_comment":0,"rttpg_category":"<a href=\"https:\/\/moneyhub.ee\/en\/category\/useful\/articles\/\" rel=\"category tag\">Articles<\/a>","rttpg_excerpt":"Courts have suspended processing payment orders for quick loan debtors, which could destroy the business model of quick loan companies and create a huge amount of additional work for debt collection agencies.","_links":{"self":[{"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/posts\/18610","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/users\/7214"}],"replies":[{"embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/comments?post=18610"}],"version-history":[{"count":0,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/posts\/18610\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/media\/18611"}],"wp:attachment":[{"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/media?parent=18610"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/categories?post=18610"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/tags?post=18610"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}