cash converters (southampton)

HellBoy_2

i just spotted an advert taped to their window

Unexpected bills?
borrow upto £600

typical 2229.8% APR

surely this must be some kind of a joke

any one else spot this advert?

dane-katie

It will be one of those ones where they hold your cheques for you for 28 days, they are all over like money shop too.

CyCo_2

No, it's not a joke. And there are some companies who offer a much higher interest rate than this. They feed off peoples' desperation for quick money on a short term basis.

Freddie_Snowbits

Yes, they have to display the APR because the Rose Tinted Do-Gooders have said they have to. This allows those wallahs at DogWatch to come over all glory, and say how harsh these rates are and how people are getting ripped off etc, etc, etc.

When probably they are cheaper for that short term loan than the banks (£5 a day and bounced cheques) are. So for about £150 to get home for a weekend in an emergency, has happened to me when I moved once, a darn sight cheaper than NotWest who refused, wanted to charge £5 a day for 10 days (£50), cost at this place was £8, plus £20 admin fee. I used it twice for a total of £200, total cost was £36. Not West would have been £5 per day, with no cash!

So unfortunately in this country, the real providers in emergency are not the banks, charity or the DHSS, but these places.

What was your complaint?

shaun_from_Africa

typical 2229.8% APR

A bit of a bargain when you compare it to this lot.
https://www.wonga.com/

£200 for 20 days and the interest rate is 4214%

BlueAngelCV

It always makes me laugh when I see adverts like that on tv. You can't say they don't make it clear up front though.

paddyrg

If I come to you (you don't really know me) and ask to borrow £100 for a week, you can see I'm in trouble, but might be a bit of a risk, you agree, and we agree I'll give you an extra tenner for your trouble. Seems pretty fair, possibly a bit steep, but hey you're taking a chance and deserve something for your grief. Would that sound unreasonable to you?

Now run that through the APR formula

P=(sigma) A/((1+(R/100))^T) where P = 100 (loan amount), A=110 (amount paid in first week), and T = 1/52 (for 1 week)

With some jiggerypokery, R comes out to be 14,100% APR. That loan now seems outrageous based on APR alone, doesn't it? If it was a fiver I gave you instead, that still works out as 1,200% APR.

Darksun

BlueAngelCV wrote: »

It always makes me laugh when I see adverts like that on tv. You can't say they don't make it clear up front though.

Yes you can...

fozmcfc

How many times does this come up, paddyrg's example says it all. The APR is nonsense when it comes to a short term (1 month etc loan).

But legally they have to show the APR in their advertising.

Far too many people obviously don't know what the word ANNUAL means.

Enfieldian

Yawn...

This one must have escaped from the "Loans" board, at least it was posted on the right day though....

Cool_Mint

What a lot of people here don't seem to understand is that the kind of people who take out short-term loans are already in debt and will not be able to pay back a short-term loan before the amount skyrockets. The short-term lenders don't want you to pay back on time.

Short term loans are a good deal IF you can pay back on time but if you can't they are a nightmare.