Interest rates

macaque_2

A loan company is currently running a TV campaign for loans at 1734% (one thousand, seven hundred and thirty four per cent). Is the FSA asleep?

Percy1983

To be honest as far as short term loans go the APR isn't really an issue, if they lend out £100 and 12.9% APR for a week it really wouldn't cover staff time to arrange the loan.

As long as they display what will be paid upfront there is no issue.

wymondham

I saw that and paused it to look for the the '.' !!

I realise that as the loans are over a short period it's not really an issue.....but... we are always being told to look at the APR ... this is our reliable way of seeing true comparisons etc etc, yet here we are saying it's not really relevent - is there something wrong with the APR system?? This is liklely to confuse...

RenovationMan

Pay day loans may seem to be just one step away from loan sharks but no one is forced to take these loans and no one has their fingers broken if they fall behind on them.

The people who use these companies need to have a long, hard look at themselves and their finances. For example, a lot of the guys on the Debt boards all seem to have full Sky packages and hefty mobile phone contracts. I don't have either because I haven't reached that level of disposible income to justify it. Perhaps when I am mortgage free I may treat myself.

michaels

Martin has run numerous pieces on this issue, probably best to read them before reinventing the wheel with our own analysis.

Example: http://www.moneysavingexpert.com/news/loans/2010/12/have-your-say-on-high-cost-lending

purch

That sounds pretty cheap.

I thought wonga advertised over 2000% :eek:

Percy1983

The way I could see this is if it costs £25 and stops 2 direct debits bouncing costing £30 each then its easily worthwhile (if a one off situation), if you fund yourself with such loans month after month you need to really look at your finances.

As you will guess the DFW boards are full with problems with such lenders, but as said above before these companies it would have been loan sharks.

HAMISH_MCTAVISH

RenovationMan wrote: »

full Sky packages

We have a pretty decent income, only a small mortgage, and no other debt.

And even I can't justify spending money on Sky.

It just feels like a rip-off.

RenovationMan

HAMISH_MCTAVISH wrote: »

We have a pretty decent income, only a small mortgage, and no other debt.

And even I can't justify spending money on Sky.

It just feels like a rip-off.

I wonder if they ever monitor which channels they actually watch. I would hazzard a guess that most of what they watch could be viewed for free on Freeview or Freesat.

From reading the retorts on the debt board when the regulars tell them to get rid of their Sky or mobile phones you would imagine they had suggested they sell their kids into slavery. No one had a mobile or Sky 20 years ago and yet life somehow went on.

Percy1983

Likewise I can't see the value in sky, with that I recently got a freeview HD box for £35 and thats makes the freeview deal even sweeter.

I will admit my mobile costs me £6.80 a month, but I do use it enough to justify it, I know many who are on £30+ a month contracts and keep getting a new 'free' phone every 1-2 years, I do tell them the phone isn't actually free and refer them to the deals I go for.

[Deleted User]

purch wrote: »

That sounds pretty cheap.

I thought wonga advertised over 2000% :eek:

try 4200% apr,the clue being in the apr as most wonga loans are for a few days maybe a couple of weeks,and it can work out cheaper than an unauthorised overdraft