Typical 621.8% APR

file_wizzard

I know “sub-prime” products are quite often discussed here, including the Vanquis / Aqua cards, which contrary to popular belief can actually be a very good thing, however I came across the following and really cant even begin to defend it!.

I appreciate that the APR is a little irrelevant as the loans are intended to be over “3 months” however you have to wonder whether £200 in fee’s for a £500 loan offers value for money regardless of the APR !, you also have to wonder how many people would “unexpectedly” have to refinance at the end of the initial term.

Even makes good old provident look like value for money !!!

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At 3monthloan.co.uk we have designed our services to be as simple as possible for customers. We realise that you need to understand clearly your financial commitments. We therefore use a simple and transparent charging system you repay £40 for every £100 you borrow, and nothing more.

You borrow: Total amount payable (split over 3 paydays):

£80 £112
£100 £140
£200 £280
£300 £420
£500 £700
Typical 621.8% APR

jessicamb

Where do I sign up? :rotfl:

immoral_angeluk

The term loan shark comes to mind..

COOLTRIKERCHICK

is it legal :eek:

lazza_w

Where did you find this! Is is so apalling I feel like writing them a sh*tty email just to let them know that they are preying on those in financial dire straits.

Do they have lovely 'reps' to collect the repayments whose knuckles drag on the ground, carrying a piece of wood with a rusty nail in the end to help you pay them the money back?

THE_LONE_RANGER_4

Its A Disgrace , I Realy Wish People Wouldnt Borrow From These Type Of Firms .

southernscouser

I'm gonna get lynched here but I don't think it's that bad!

Lets say someone is at risk of getting a CCJ if they do not pay up the £500 they owe immediately and all they can afford is £250 a month because of a temporary financial problem! They get this loan. It costs them an extra £200 but they are CCJ free!

Now compare it to a well known nationwide bank who lend you £25,000 over a period of 7 years despite you already having a load of debt. OK the APR is quite competitive but it still pushes your finances to the limit. Your interest will cost you more than £6k and you will be penalised for making overpayments!

Who is worse in your opinion? :think:

irishwench69

Have got to say I agree with southernscouser ( :eek: )

If these loans were only for people needing a small amount of money for the short term, which would then be quickly paid off (e.g for a small but urgent (pending CCJ etc) debt), it might just be understandable.

These companies are in it to make a profit - maybe morally wrong, but many of the people borrowing from these people are going into things with their eyes open.

I could only really see a problem when you were talking about bigger sums of money......

IW x

DavidHM

Thing is, there will undoubtedly be a small number of people who are in that position and yes, for them it would be a good deal or at least less bad than the alternative. Of course, if they haven't got the CCJ yet there's quite a good chance that a more competitive lender would be available.

I would agree that they're not necessarily immoral but you do have to ask yourself how many people go into it with their eyes open and how many are either unaware of the true costs or alternatively, forced into it because of borrowing excessively or on bad deals in the past.

pudding06

I think its a problem advetising this at christmas as many people will just think we'll be ok for christmas with the £500 but will really be struggling to pay it back over the 3 months, then will end up taking out another etc, etc, etc, Its the cycle of debt that is a problem.

puuds

southernscouser

DavidHM wrote:

I would agree that they're not necessarily immoral but you do have to ask yourself how many people go into it with their eyes open and how many are either unaware of the true costs or alternatively, forced into it because of borrowing excessively or on bad deals in the past.

Well this is exactly my point!

With the loan on offer you know that for every £100 you borrow you pay back an extra £40! It's black and white. No hidden APR's. No hidden costs. No hidden terms and conditions.

Compare that to a high street bank loan. When do they tell you about the interest being front loaded? Early payment penalties? The real facts about PPI?

This loan doesn't pretend to be anything it isn't. High street banks on the other hand! :rolleyes: