9889% interest loan -is it extortion or good business sense???

sdooley

talking to your creditors

But a lot of people who do payday loans don't even tell their loved ones, let alone their bank manager.

And the companies don't make their money on the short term borrowers but the people who roll over the samd £200 loan for £40/month every month for a year. Pawnbrokers even are cheaper, and surrendering the pawned item to a pawnbroker isn't a default for your credit record.

I'm not sure they should be banned but close regulation is surely needed. Some people do need protecting from themselves (why else do we ban hard drugs).

chuckley

iolanthe07 wrote: »

But surely it would be much better to put emergencies (like the car breaking down) on your credit card?

not everyone can get one, for various reasons, some beyond their control.

dannyjebb

But surely it would be much better to put emergencies (like the car breaking down) on your credit card?[/QUOTE]


surely the people who are needing to borrow £100 quid till the end of the month have either maxed out CCs or cant get 1 in the first place

hundredk

Rafter wrote: »

nomoneytoday beat me to it. If you borrow £50 from a mate on Friday and buy him a beer costing £2.50 on monday to say thanks, the interest rate is 1.64% per day which is an APR of 37,747% if you borrowed only £20 it would be 4% per day and an apr of 167,323,384%

Just curious and not disputing these figures but how are they calculated - ie 4% per day to :eek:167,323,384% apr?

ffacoffipawb

hundredk wrote: »

Just curious and not disputing these figures but how are they calculated - ie 4% per day to :eek:167,323,384% apr?

(1.04 ^ 365) - 1 = 1,648,802 = 164,880,200%

Close enough.