What's the highest reasonable interest?

Former_MSE_Archna

Poll Title: Poll Started 26 September 2006: If you were to borrow £100 over a week, above what level would you consider the interest to be extortionate?

A. 10p
B. 50p
C. £1
D. £2
E. £5
F. £10
G. £15
H. £25
I. £50

Click reply to discuss or vote here.

alun4

If this only for a week and even if there is no real risk to the lender of the borrower defaulting the administartive cost is the only real consideration here so I think the interest rate has little relevance. Think more about the call out charge of any proffesional.

Mark7799

It depends what I wanted it for. If I was really desperate I'd ask friends and family first but make damn sure I would have the wherewithal (sp?) to pay it back within the promised timescale. If I couldn't then I'd try and do without for a week. Even £1 a week amounts to over 50% pa interest. If it was a cse of borrowing on credit card or overdraft until salary then anything over 50p is too much.

Cumbrian_Male

I hope that Martin posts up the APR's for each option when the results are published.

In reality you could borrow this sum interest free by cancelling the agreement during the cooling off period.

Thefunkygibbons

Anything over 50p is high

But adverts always revert to per week so as to make the number seem smaller

Twopints

50p a week equates to (very roughly) 25% which I consider extortionate. So I'd have to go with anything over 10p.

:beer:

robellett

As the question only relates to the cost of borrowing, without relating to the 'how to' of borrowing, the only relevant figure to bear in mind is the APR. This allows for meaningful comparison between other options.

There's no mention of needing home visits of professionals etc. in order to secure it. Just the cost of having the money. That's how I've figured out my response to this poll.

Above 10p is too much for me.

Former_MSE_Dan

Here are the results of the poll

[FONT=Verdana,Arial]Poll Started 26 September 2006: If you were to borrow £100 over a week, above what level would you consider the interest to be extortionate?

[/FONT] E. £5 22.2% - (935 Votes)
F. £10 18.2% - (769 Votes)
A. 10p 13.3% - (564 Votes)
B. 50p 13.3% - (560 Votes)
C. £1 12.9% - (547 Votes)
D. £2 8.9% - (378 Votes)
G. £15 5.6% - (239 Votes)
H. £25 2.8% - (122 Votes)
I. £50 2.2% - (95 Votes)


[FONT=Verdana,Arial] Total Votes: 4210[/FONT]

choclover

I think a lot of people got confused by this. It looks like people chose £5 or £10 because they thought it was 5 or 10% of the £100 borrowed. This would be the case in the amount was borrowed over a year, but it was only borrowed over a week. I can't imagine anyone willing to pay £260 (£5 a week x 52) to £520 (£10 a week x52) in interest over a year for debt of only £100!

pezza88

I don't think that this is true, I said £10 I think because if I desperately needed £100 now, it would not be totally extortianate (like a pawnbroker). If I was lending from a bank for a year, then I would probably expect to pay a similar amount to be honest.