177% apr on £500 loan

stitch69

Hi
Just a quick post as im new here. i received a letter this morning offering a £50 to £500 loan with a typical apr of 177%, i just think this is ridiculous and really worrying. the company was called Provident personal Credit. im just wondering if there is a law against APR's that are this high. has anyone seen higher ?
thanks

stitch69

Coupon-mad

Wow, that's astonishingly high! Do they appear to be a local moneylender (from the telephone numbers given, etc) or a national company? I expect your local Trading Standards would be interested.

(Or have they missed off the decimal point on a 17.7% APR?!):D

stitch69

Apparently there the "UK'S LEADING HOME CREDIT PRVIDER" and they have an 0800 number. a "local agent" brings you your money then comes to your home each week to collect you payment.
im pretty sure it isnt a miss print. the give an example of a loan of £300 55 weekly payment of £9 total amount payable £495. thats just ridiculous.

Bunnie1982

Both my Mum and my sister have had loans through Provident so I can confirm that their APR is ridiculous

geo555

Its true it is a typical 177%APR.
I had a look on their website https://www.providentpersonalcredit.com
They have a loan calulator, so I checked out what it would be. On a £50-£500 cash loan over 23 weeks the APR is 497.4%
Thes people pray on the peolpe who cannot afford to borrow from anywhere else and use the ruse that it is only a few pounds a week repayment.

CIS

I got one of those letters last week , they should ban loans at those rates - I wouldn't be tempted to get one but I know my B.I.L and his girlfriend do, she takes them without telling him and leaves him to pay the loan off.

Zippy123

Why should they ban loans at those rates? The company needs to make money and the extra charges in someone turning up and collecting a payment needs to be covered.

They also need to cover bad debts etc which are high in this sector.

They are not forcing you to take out a loan are they?

chugalug

And its all perfectly legal!! The govt have confirmed they won't put a ceiling on interest rates charged on the basis that consumers have a right to choose. Some choice eh!!

inmypocketnottheirs

How much money do you think it costs to operate a door step collection loan scheme. Where a high percentage of borrowers will default? If you can't borrow at a lower rate and need the money then what are your options. How about no body lending money to anyone with a less than perfect credit score, who owns their own home and earns a minimum of £50,000 per year. Why should Government legislate for idiots? The rates are all laid out, and APR's are misleading when used in this way on small loans. But that is what the Government wanted. Keep people in debt and you keep them subservient.

webmasterpolo

IMHO Consumer choice is good.

Why should the government get involved when it's all laid out clear and it's the consumers choice if they want to pay for the money, or live without the money. If it was banned they would just have to live without the money.


-Web

Astaroth

Also remember that APR is an odd thing - they have to include any fees in the calculation and have to gross it up to an annual amount based on £1500 loan. If you look at the Natwest Black card, one of the most exclusive credit cards available (have to earn over £70k to be able to apply) in the UK it has an APR of over 50% but an interest rate of 12% - they have a high annual fee that APR calculations take into account.

These companies provide a service either to people that cannot get it else where or on terms which are not available else where - If I didnt have a bank account that had an overdraft facility, I could walk into a cheque cashing place and cash a post dated cheque for £250 for a fee of about £15 (as an APR of around 75%) but 1) I dont think the fee is that bad 2) where else could I get £250 for 30 days as quickly or easily?