PayDay Loans - I used one responsibly, and didn't get stung!!!

sharpy2010

But Gingertilly has already stated that he/she's used these loans WITHOUT ISSUE, so if thats how they want to organise their life, where is the problem?

backinbusiness

gingertilly wrote: »

It doesnt mean that I waste my money . . . . . costing me between £0 and £4 in interest.
Just to clarify, I have used one (or ten )

Surely a "waste" of £40? (or another 13 pints!)

Just saying

Daddy-Spendless

Johntea wrote: »

How about you save that £4 (example) you're paying in interest in a coin jar or something every week? That'll buy you a pint or takeaway!

All it takes is one slip and you're stuck in the trap. Fancy a few extra beers? No problem I can just text Mr Payday Lender from my mobile in the pub and the cash will be in my bank account 15 minutes later! Sadly the hangover will last all month...and possibly beyond.

There are much more responsible ways of lending before having to resort to these. For starters (exluding savings), how about setting a small formal overdraft up with the bank. It shouldn't be left 'maxed out' it can be used for a few days to fill the gap before payday then cleared in full each payday.

To be fair i think its just easy to end up in an overdraft trap as it is trapped in a cycle of payday loans.

what starts out as an emergency spend a couple of days before payday can quickly become spent a week before payday, then 10 days 2 weeks etc etc. and before you know it the OD is spent and gone & clearing it with your wages each month is just an illusion as you can no longer get through a month without using/maxing it.

JMHO of course, but i do hate my OD.:rotfl:

andrew-the-cat

I guess pay day loans work well for people who don't see them as free money.

raider

property.advert wrote: »

Perhaps the balance to this argument is that people should not blow every last penny they ever get but actually set aside some regular savings, however small, to tide them through periods like this.

Being a high ranking platinum member of a parasitic pay day loan company is hardly something to brag about but rather an indication of constant and prolonged mismanagement of money.

Well said property.advert, couldn't have put it better myself.

Is it really that difficult to put away maybe just £5 a week, then borrow from yourself when need be, giving yourself the interest and building a bigger balance to borrow from in the future?

drjones

sharpy2010 wrote: »

But Gingertilly has already stated that he/she's used these loans WITHOUT ISSUE, so if thats how they want to organise their life, where is the problem?

It's not really the use of the loans that's the issue, it's what their use implies, as property.advert and others have mentioned. Using a pay day loan is far, far more risky and expensive than taking a small amount from your own savings, so the only reason to ever use one is that you don't have any savings.

Not having any savings at all, particularly over extended periods, does point to serious mismanagement of money. I find the thought of having no savings genuinely scary, and if I ever end up in such a position for whatever reason, I would immediately start taking serious action to rectify the situation. Cutting out takeaways and a couple of extra beers would be a good start!

DorsetGirl_2

You may have had a good experience with them, but at the cost of your credit file (unless it was terrible already).

Wutang_2

DorsetGirl wrote: »

You may have had a good experience with them, but at the cost of your credit file (unless it was terrible already).

is this right - take out a pay day loan, then pay it back and it ruins your credit file? wow

katejo

drjones wrote: »

It's not really the use of the loans that's the issue, it's what their use implies, as property.advert and others have mentioned. Using a pay day loan is far, far more risky and expensive than taking a small amount from your own savings, so the only reason to ever use one is that you don't have any savings.

Not having any savings at all, particularly over extended periods, does point to serious mismanagement of money. I find the thought of having no savings genuinely scary, and if I ever end up in such a position for whatever reason, I would immediately start taking serious action to rectify the situation. Cutting out takeaways and a couple of extra beers would be a good start!

Financial advisers recommend keeping the equivalent of at least 3 months take home pay as a cushion in case of emergency. I do have just about that at the moment but have not always had that much. I do wonder how many working people do have that?

Derivative

katejo wrote: »

Financial advisers recommend keeping the equivalent of at least 3 months take home pay as a cushion in case of emergency. I do have just about that at the moment but have not always had that much. I do wonder how many working people do have that?

I am a student and so "take home pay" doesn't really apply to me, but I could last more than 3 months on my savings.

Most of my friends have bought themselves cars and similar. I'd rather have the security of knowing I could get kicked out of University tomorrow and not need help from relatives/similar for a while...