Anyone who borrowed money and did not pay it back could be taken to court. Strict regulations prevented people from borrowing money unnecessarily and the penalties were severe. At the beginning of the 1800s a guilty person could end up in jail.
Then as now, most people borrowed money to buy their own home. A few people borrowed for consumption. For example, there are records about one poor peasant farmer who has bought expensive silk waistcoats and hats. Other people might borrow to eat and drink at pubs. As society grew and changed and luxury consumption increased, so, too, did the number of loans for things that were not absolutely essential.
The highest interest rate permitted by law was 6%. Even after this restriction on the interest rate was removed, Swedish society considered that asking for a higher interest rate than six per cent was usury – that is, unreasonable and exorbitant. One exception was the pawn shops, which demanded 6% plus the same amount again as a fee.
Today a quick loan via text messaging, plus the associated fees and other charges, can have an effective annual interest rate of over 50,000%.