Tv Adverts for Money Lenders

brightonman123

i thought 'proper' banks and credit cards were bad..

how on earth do these firms get a lending licence, with such outrageous interest rates?

Tropez

brightonman123 wrote: »

i thought 'proper' banks and credit cards were bad..

how on earth do these firms get a lending licence, with such outrageous interest rates?

Because most banks won't lend £100 over a short term which is the gap in the market that these other lenders are filling.

Nobody has to use them and the interest rate might be outrageous if you look at it was a 12 month loan, but it isn't supposed to be used in such a fashion. It is a small amount of cash for a small period and as stated above people only get into trouble when they don't pay it back on time. If your financial planning is so utterly atrocious that you can't pay back a small loan that you took out for a short period then you're going to get in trouble one way or another at some point anyway.

Also, Wonga and their ilk are hardly anything new. Such lenders have existed in such form for a long time, usually as part of a pawn shop. They're only getting such publicity now because the newer breed is able to serve more customers and make enough to advertise on television.

If someone really needs that loan, better they go to Wonga than Shifty Pete who deals with late payments with a crowbar.

arcon5

brightonman123 wrote: »

i thought 'proper' banks and credit cards were bad..

how on earth do these firms get a lending licence, with such outrageous interest rates?

Thier fees are reasonable, borrow £100 the fee is £25 for example. It just wouldn't be a viable business model to charge based on an APR. Basing how reasonable their fees are on their equivalent APR is NOT a reasonable for short-term lenders. If it was, the fee would be about £3ish so therefore unreasonable.

brightonman123

some people may not have a choice, if needing to borrow money and the banks wont help..

My beef is the huge APR, which they seem to gloss over, or even offer a 'discount; on, if you quote xyz code, seen on some ads..

Imagine if a bank started asking these rates??

RichGold

wik wrote: »

as I am sure that some people end up being sucked in by them at this time of year in desperation.... And they dont take much notice of the payback terms as that bit seems to flash by quickly! Last night there were 3 in a row on one channel!!

https://forums.moneysavingexpert.com/discussion/3694211

Enough said.

WhiteHorse

Caveat emptor goes only so far. If we as a society permit these loan companies to continue, then we will not survive as a society.

And we don't deserve to, either.

RichGold

WhiteHorse wrote: »

Caveat emptor goes only so far.

There have been people ripping other people off since the beginning of time. As bad as it sounds, its human nature to some people (who also become very wealthy in the process), and short of banning these businesses, which would only make these predators pop up in another sector or line of busniess, I'm not sure how you'd alter this situation.

WhiteHorse

RichGold wrote: »

There have been people ripping other people off since the beginning of time. As bad as it sounds, its human nature to some people ...

Yes, this is all true.

On the other hand, people have also been murdering each other since the beginning of time. There are limits to what should be tolerated.

arcon5

brightonman123 wrote: »

some people may not have a choice, if needing to borrow money and the banks wont help..

My beef is the huge APR, which they seem to gloss over, or even offer a 'discount; on, if you quote xyz code, seen on some ads..

Imagine if a bank started asking these rates??

And once again you've entitrely missed the point with these types of companies!

Comparing a bank loan to a payday loan isn't fair, nor is judging them based on an APR. They are not designed for longer-term borrowing.

If your going to form an opinion on these companies, atleast do so from a fair angle. It's these kind of comments that are ridiculous.

celtus

My worry is if the mainstream banks start jumping on the band wagon and offer a two tier bank loan system, one for 'normal' loans and the other for allegedly short term 'payday' (Predatory lending) loans... Again it is very poorest in our society, who can ill afford these outragous rates of interest in the first place.

My belief is the people behind these payday loans dont really want you to pay it off in full at all, so that they can continue to extract every last penny from people in desperation.

Story of a person in the S*** due to payday loans (link below)
http://whatconsumer.co.uk/forum/financial-services/13913-payday-loan-charges.html

http://www.youtube.com/watch?v=vVkFb26u9g8 Money is debt.

I know people will take great delight in telling me 'its their fault ect ect, for taking out these loans in the first place, but it still doesn't take anything away from the fact that these loans are morally wrong....and no i would never ever touch them myself