Award for highest APR ever - 177%!!!

james10999

The Winner is:
Provident Personal Credit
http://www.providentpersonalcredit.com/

Example: Loan amount: £300, 55 weekly repayments of £9
Total amount payable £495. Typical 177% APR

I can't believe this offer, what a joke!
Has anyone ever seen a higher % APR rate?

How can these guys get away with it?

nomoneytoday

If you do a search on this forum this topic has come up many times, along with credit cards charging 49.9% and mobile phones at 199% APR

They are then followed by posts involving credit unions, rebuilding credit history, the cost of doing door collecting business, the inability of people to get cheaper credit etc etc

Rafter

james,

You could look at it this way though.....

The total interest for this loan is £195.

The person collecting the money charges £1 for each collection, that is £55.

One in 10 customers (these are high risk customers) never repay their loan. Cost £30.

The paperwork, time to setup the loan etc costs £20.

The loan costs £2 per month to administer (computer systems, bank charges etc). £25

Provident has to borrow the money from the markets or savings customers at a cost of£10

Total costs are therefore £140 and profits of £55 or £1 per week per loan.

Is that unreasonable?


Another way of looking at it. Would you lend at say 20% APR or £6 per week in return for £30 in interest when you know your costs are £140?

These aren't like internet loans for £'000s where the interest covers the cost, customers are low risk and all the payments are electronic.

R.

james10999

It baffles me why people take loans in the first place.

If you can't afford something, DON'T BUY IT!

james10999

james10999 wrote:

It baffles me why people take loans in the first place.

If you can't afford something, DON'T BUY IT!

I guess the only loan which I see as acceptable is a Mortgage

Astaroth

Yes, look at the cheque cashing services, they charge much higher "APR" due to the low limit and short loan period which for APR calculations you have to increase to a £1500 loan over 12 months.

http://www.payday-express.co.uk/questions_answers.htm

Above has an APR of 1286.1%

How much does it cost?
You repay £100 for every £80 you borrow. There are no administration fees.
Typical Example: Loan - £80; Interest - £20; Total Repayable - £100; Term 31 days; APR – 1286.1