the money shop

maggiesmummy

Hi,
After a bit of advice really - a friend is considering a payday loan from the money shop. The stuff I've seen on line is a bit of a mixed bag. Any views?
Thanks
Mm

tallyhoh

Absolutely not, do a search on this forum & you will see many tales of woe.

Hannah_10

I really think any payday loan is a bad idea. They charge two hundred and sixty percent APR. I had to type that out in words because if I was reading 260% APR I would think there had been a typo. There is no typo. To put this in context a pretty typical credit card might be 17% APR (fifteen TIMES less), and if you pay your credit card off in the same timeframe (1 month) you usually pay no interest at all.

Payday loans companies make thier money out of people who can't get more sensible forms of lending, like credit cards, or loans. This is a risky sector, so they charge hugely. If things go wrong they will steal from your bank account under a dubious but technically legal arangement which you can only stop by closing your whole bank account. You think because it involves your card that you can cancel it- not so. That arangement (I forget the exact name, might be continous payment authority or similar) allows them to take what they want, whenever they see fit. There have been many reports of people not having the money to eat even because a PDLC has stolen hundreds from them out of the blue. You would think they had to have your express permission to raid your account and that you could remove that permission, but it is not so. They pile on the charges quickly and hard at the first sign of trouble. Many people have found that they owe ten times what they ever borrowed in a matter of weeks. If you do get into trouble you'll have a devil of a job getting them to accept reduced payments too.

Please just don't.

Nothing is that desperate that it can't wait till payday surely? And if it is then tell us what because the chances are we can think of some other less dangerous way to come by it (be that food, nappies, whatever).

[Deleted User]

Do a search on this forum and show your findings to your friend - or get them to join the forum, and see if they can sort out their finances another way.

Often payday loans spiral (due to the hugh APR's) making them impossible to get out of unscathed.

If your friend is having money problems they would be better to seek professional help - one of the debt charities (free) CCCs, CAB, national Debt line

If they are just a bit short this one month and need cash short term (and don't have debt problems), either recommend for them to apply for a credit card (and pay it off in full at pay day), ask the bank for an over draft, or recommend to them to make cutbacks in other areas (or e-bay, amazon etc unwanted things) before considering a payday loan.

D9

maggiesmummy

Thanks all - will let her know.
mm