Omg apr 2356%

michael1983l

I can't beleieve people are defending an interest rate of over 2000%. Wether it is annual rate or not these rates are still extoritionate and it is these companies that usually tend to finish people off financially. They should be illigal.

Obi167

i think people may be missing the point here. Payday loans are bad generally, but not because of the APR figure - but because of the way they prey on the financially unstable (i.e. sending emails to people already in arrears asking them to take more).

wendyphant

oh dear i have opened a can of worms.

I was just here are saw the advert while trying to write a letter to santa - with a 2 year old not mine lol. I was just so shocked at the figure and thought it was a misprint on the screen til i checked their web page.

And for those of you who thought i was going for one don't worry I won't x x

wizk1

How are they preying on the financialy unstable. It's perfectly clear how much you borrow and how much you pay back. Nobody forces people to to take our these loans. This is a typical case of people wanting to use a service then moaning about paying for it.

gilligansyle

Hi
as others have said, there are two issues here.
1. payday loans in general are not a good idea because of the cycle of debt that happens, ie. borrow £100 pay back £120 so next month short by £120 so borrow £150 next time etc.
2. the APR. Yes 2000 odd percent looks bad, but these are short term loans. Nobody would take that over a year and I'm sure no one is defending these companies.
The explanation that always worked for me is the one about buying a mate a pint. My sister used to regularly 'borrow' a fiver off me and then buy me a bar of chocolate when she paid it back.If you work it out, that adds up to a lot of interest.

michael1983l

wizk1 wrote: »

How are they preying on the financialy unstable. It's perfectly clear how much you borrow and how much you pay back. Nobody forces people to to take our these loans. This is a typical case of people wanting to use a service then moaning about paying for it.

The reason why people borrow from payday companies is uaually because of 2 reasons

a) they feel there is no alternative and are desperate

or

b) they are not the brightest sparks in the box

I see no other valid reason to borrow from these companies, so yes that makes them financially unstable. Also as mentioned the payday cycle is generally a terminal one, once your in the cycle you are constantly borrowing again to catch back up thus getting more interest levied against you. I nearly had to go bankrupt because I used these companies when I was desperate. In retrospect I shouldn't have touched them with a barge pole and the only reason I am not bankrupt today is for the kindness of my family.

I strongly advise these companies are not used and I also would help with any movement against getting them made illigal. They destroy lives these companies, FACT.

theartfullodger

wizk1 stated....

the APR is meaningless for Payday loans.

Er... no, APR is entirely meaningful for Payday loans: And (I say this for evidential reasons, not be way of boasting... ) I have a degree in mathematics ...

Cheers & best wishes to all, including those who disagree with me...

Lodger

RobertoMoir

theartfullodger wrote: »

You think that's bad.. try those blood-sucking e**l b******s at wonga.com: They charge 2,689%!! As standard!! Can be higher??!!!!! They are all a bunch of people most sensibly-minded folks would regard as crooks: They could, of course, be wrong!


Cheers!

Lodger

Leaving aside the significance of APR for a short term loan, this does bring me back to my rule of not doing business with companies who mis-spell their name or who have a stupid "cute" name. Nothing says "finance professionals" like referring to money as "wonga". Sheesh.

ILW

michael1983l wrote: »

I can't beleieve people are defending an interest rate of over 2000%. Wether it is annual rate or not these rates are still extoritionate and it is these companies that usually tend to finish people off financially. They should be illigal.

What would you condider a fair amount to pay back if you borrowed £100.00 for a week. Bearing in mind that the lender neds to at least cover their costs etc.

bigdave1973

Malky wrote: »

Does this not work both ways? The company offer a service, the customer chooses whether to use it or not. I'm not trying to defend these type of companies but they're here to do what any other company does and that's make money. Just fed up of similar posts on a daily basis and then the company always getting the blame for charging high interest rates when it's down in black and white before you sign on the dotted line.

Awesome post! Someone needed to say it!