High Interest Rates!

darleydame

Just had an email offering me a loan
This I suppose is legal but I bet someone out there can top it!

Representative APR 1737%
If £750 was borrowed for a period of 31 days at a fixed rate of £25 per £100 borrowed,
the total amount repaid would be £937.50.

Peelerfart

Not only will someone top it, quite a lot out there have taken the loan out too.

jonsyt

Quick quid charge £15 pound for every £50 borrowed so £750 over 31 days total amount repaid would be £975 , Its a Legal Con that`s all that could be said about it !

talana

jonsyt wrote: »

Quick quid charge £15 pound for every £50 borrowed so £750 over 31 days total amount repaid would be £975 , Its a Legal Con that`s all that could be said about it !

No it isn't, whatever else you may think about it.
Unless you can point out the con to us...

poppasmurf_bewdley

Radio Five Live has been doing a feature on Payday Loan providers this morning on the Victoria Derbyshire programme.

Apparently, many of these companies have come over from America because these loans have been banned over there.

jonsyt

Con maybe the wrong way to put it Legal loan sharks is what they are , They give loans out at extortionate rates of interests to people who they know wont be able to pay it back on time . As poppasmurf states this type of loan was banned in the US .

My Sister a couple of Years back got a £150 loan through One of these internet payday sites and she was on job seekers allowance of around £50 a week , My mam paid it back for her then they offered her a loan for a £1000 which she took and obviously could`t pay back and they knew this (with the money she was on it would of took her 39 weeks to pay back and that being every penny she got)

How can any company justify offering a £1000 over 31 days with interest being around £900 on top of that to someone who has income of £200 a month . A toddler could see that it aint going to get paid and theres a nice amount of interest being added on of £900 per month while its unpaid .

Thats where the companies are in the wrong and i sincerely hope the uk pulls its finger out and does something about these people .

kaisersoze_2

jonsyt wrote: »

Con maybe the wrong way to put it Legal loan sharks is what they are , They give loans out at extortionate rates of interests to people who they know wont be able to pay it back on time . As poppasmurf states this type of loan was banned in the US .

My Sister a couple of Years back got a £150 loan through One of these internet payday sites and she was on job seekers allowance of around £50 a week , My mam paid it back for her then they offered her a loan for a £1000 which she took and obviously could`t pay back and they knew this (with the money she was on it would of took her 39 weeks to pay back and that being every penny she got)

How can any company justify offering a £1000 over 31 days with interest being around £900 on top of that to someone who has income of £200 a month . A toddler could see that it aint going to get paid and theres a nice amount of interest being added on of £900 per month while its unpaid .

Thats where the companies are in the wrong and i sincerely hope the uk pulls its finger out and does something about these people .

Why did your sister take out a loan knowing she couldnt pay it back, it works both ways.

jonsyt

18 year old student out partying every night at uni stupid i know , Its like dangling a piece of meat in front of a dogs nose only a matter of time before they grab it .

It agree it works both ways but surely there should be a rule to stop these companies lending money to people they know they cant pay back in a bid to add stupid amounts of interest .

Peelerfart

jonsyt wrote: »

18 year old student out partying every night at uni stupid i know , Its like dangling a piece of meat in front of a dogs nose only a matter of time before they grab it .

Interesting analogy,

(don't think you're Sister would be to impressed with it though)

But if the dog knew it was rancid and was gonna give it some serious grief then surely.........

accountingbod

I heard an article about this on Radio 4 this morning. Evan Davies was talking to a guy from the CFA (i think this was the right name - he represents some of the larger payday loan companies).
At the end of the articles, he did state that some of the interest payments, although being high are less than what you would pay for being overdrawn on your current account. This may be true with some banks charging about £5 a day in some cases for being overdrawn but i thought this was for unauthorised borrowing whereas payday loans would be classed as authorised borrowings?
BUT, he was definitely a lobbyist for these companies so no way impartial and he tried to dodge a lot of questions.

My thoughts are that a seperation needs to be made between authorised and unauthorised borrowing. Authorised borrowing should be capped at a level that keeps competition but doesnt take advantage of short term needs of consumers. Unauthorised is a bit more dubious but there should limits to this as well.
Ultimately, i suppose interest rates on loans always lie with the risk involved but small short term borrowings can not pose that much of a risk if the lenders screen the borrowers properly?

I'm going to stop now before i dribble on and on and on and on and on and on.....

jonsyt

Peelerfart wrote: »

Interesting analogy,

(don't think you're Sister would be to impressed with it though)

But if the dog knew it was rancid and was gonna give it some serious grief then surely.........

She was stupid and she learnt from it i hope . But these are the type of people these companies pray on