Can it be true Interest rate is 18,250,000% per annum

Robert_Sterling

Imagine a case in which if you help yourself to an unauthorised overdraft of up to £2,500 the lender will charge us £5 per day until it is cleared.

Let us take a worst case when we inadvertently go 1p into the red without prior permission.

The payment of £5 is 500 times the amount we owe. This as a percentage of what we owe is 50,000 % for one day and if we continue to owe the orignal 1p for a year we will have to pay £5 each day a total of £1,825 pounds which is itself 18,250,000% of 1p.

You may think that this is a high APR but no it is not.

The lender does not charge any interest at all it charges us a fee of £5 per day.

You might like to know who owns the lender :eek::eek::eek:

Lorraine2008

If it's like the letter I got this morning, I'll give 'em sodding Xtra. I wonder if it's the same bank?

ILW

Robert_Sterling wrote: »

Imagine a case in which if you help yourself to an unauthorised overdraft of up to £2,500 the lender will charge us £5 per day until it is cleared.

Let us take a worst case when we inadvertently go 1p into the red without prior permission.

The payment of £5 is 500 times the amount we owe. This as a percentage of what we owe is 50,000 % for one day and if we continue to owe the orignal 1p for a year we will have to pay £5 each day a total of £1,825 pounds which is itself 18,250,000% of 1p.

You may think that this is a high APR but no it is not.

The lender does not charge any interest at all it charges us a fee of £5 per day.

You might like to know who owns the lender :eek::eek::eek:

Anybody that keeps there account at 1p overdrawn for a year accruing charges is a complete and utter moron and should be locked up under the mental capacity act.

nomoneytoday

APR is worked out by annualising a £1500 overdraft, so it won't be 18.25million%
However, it will be a ridiculously high number and so you would indeed be silly to have a 1p overdraft for such a time period