A plague of loansharks... what would YOU do?

Margaret54

Hi Yes many years ago whle struggling with bringing up my children alone and on benefits I fell foul of Provident, and i really had no other means to buy shoes for my children, and it was a nightmare being involved with this company. When you need something and can't wait(not luxuries) I can understand how hard it is to cope. I am so glad we are more comfortably off these past years and my children are all adults now but I still remember that awful time when money was so tight and dreaded the door knocking too.I have never had dealings with loan sharks but to me Provident is just the same as them. Ugly. Credit unions are very good I feel and we save in our local one, and how I wish there had been one locally when we struggled so much years ago. Being afraid to open your door is horrible.

Jacks_xxx

Thank you so much for highlighting this issue Martin & the team.

I'm very lucky in that I have never had dealings with either the overtly criminal Loan Sharks or the ones who appear to operate within the law - such as Pay Day Loans or The Provident.

In our town we also have one of those shops that sells pushchairs and washing machines, and sofas and flat screens at hiked up prices with exorbitant interest rates. "NO CREDIT CHECKS!!!! ONLY £5 A WEEK!!!" They prey on the elderly on pensions and the young with no credit history, single mums on benefits, and all the people who can't get standard lines of credit or don't know any better.

They are very quick to send in the heavies with their threatening behaviour to harass and frighten pensioners and single mums if they miss a payment.

The way these companies operate *is* illegal - but you have to be clued up enough to know what to do and brave enough to do it, then patient enough to endure the months and years it may take for the legal system to end it.

Benefits are not designed to be enough money live on indefinitely, but many people in this country have to bring their families up on them.

My husband was only made redundant two months ago but already the job centre has paid for him to take a college course and they have started talking about voluntary work and the new "white collar" initiatives - because they already seem to know that he's likely to be unemployed for quite some time...And he's by no means the only one is he?

So I expect business will soon be booming for The Provident and all the even more unsavoury lenders.

I don't know what the answer is though....but I know I'd sell everything we own before I'd go to any of them.

Love Jacks xxx

harryhound

"A Credit Union normally charges no more than 1% per month"..errr... that is 12% pa on loan. Not exactly cheap.

Am I right in thinking the above Credit Union would charge an honest interest rate of 1% on the outstanding balance?

That should be compared with "You borrow 100, we charge 12%, so you pay 8.33 per month plus the 1.00 interest and you will be clear in a year's time."

That is of course more like 24% interest.

RAS

Hi

yep

it is a problem with people knowing and understanding exactly what they will pay back. Did you see the programme with Esther Rantzen's daughter where young women thought the APR is the amount of DISCOUNT they get for having the store card?

Then look at the tendency for credit cards to list the monthly interrest rate - 2.59% looks a lot nicer than 30% does it not?

If you consider the debt repayment on a payday loan someone on here has at the moment she took out £400 and has to give them a cheque for £525 to repay that a month later. That is £125 interest for a loan of £400 for one month

If she took out £400 with a credit union over a year, she would pay back £33.33 capital and £4 in interest in the first month, with the interest reducing each month at 12%.

For a more expensive freedom loan - given to those with no history with our local credit union - the interest for the first month is £8.

If she repaid the whole lot after a month, it would cost £408.

gejones02

ANDENA wrote: »

she has since broke up with my son so he pays me the debt,

I am sorry for Andena for the bad experience, but at least her son hasn't let her down.

I recently needed to borrow some money and asked my parents for a loan. I pay them back with 4% interest. This is much better interest for them then they can get at any bank, and much cheaper for me then going anywhere else.

If you have a good relationship with family (and one of them has the extra cash) this can be a win win situation.

harryhound

If you have a good relationship with family (and one of them has the extra cash) this can be a win win situation.

Shhh don't tell the tax man !?!

And beware of one side of this arrangement thinking they are doing the other side a favour (which they are not).