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

madmonkey01

My wages were a few days late, and i knew in advance that would be the case. i also knew i had 4 DD that would bounce. so i borrowed 100 for a week, paid back about 110, saved my self £80+ in bank charges.

debrag

per £50 I find Quickquid to be cheaper over a 30 day period.

OldGregg1889

Hi Gyus

Interesting thread to which I'd like to add my too penneth and maybe a touch of balance as most seem to be either for or against PDLs. Personally, I wish I could go back and never have clicked the 'i agree' button for the first time. Don't get me wrong, no body made me take out a PDL and I take full responsibility for doing so, it was my own choice although at the time it seemed like the easiset solution to my problem. I have never been late or missed a pdl repayment but my issue was that i got into the trap of not having enough to last the month after paying back so continuousoly had to re borrow - usual storey.

Now i fully agree that they can be useful in certain circumstances and can indeed save money compared to bank charges. If you've got an irregular expense to pay, you're certain you can repay on time and, here's the crutial bit,still have enough money out of your next months wages to get by without having to borrow again then great, pdl's may well be worth considering. As such, I have no desire to see PDLs banned as some have suggested, despite them having cost me quite a lot of money in interest (I hold my hands up - this was through my own financial mismanagement).

Having said that, following my experience i completely disagree with phrases such as 'using them as they are intended' etc etc. I have no doubt what so ever that every pdl company i have ever used has encouraged regular re-borrowing to varying levels in order to suck people into the dreaded trap. It's pretty obvious that monthly reborrowing is a good thing for the pdl lenders as this is how they make the most money. I could now easliy go and borrow 70% of my next salary from one of at least 2 pdl lenders. How on earth is anyone who needs this type of borrowing meant to pay back 70% of their salary on payday and still have enough left over to last the month without re-borrowing? Also, at least 2 of the companies actively encourage you to defer and only pay back the interest meaning you never settle the loan. One company i dealt with actually automatically defered the loan unless i explicitly told them I wanted to settle it in full, another used to regularly call to make me aware of my 'deferal options'.

I feel that although no one has ever been forced into taking a pdl (and as such people really do need to take the brunt of the responsibility for getting involved), pdls are always going to be used by people who are prone to financial mis-management. I strongly feel that the pdl lenders are fully geared up to exploit this the best they can in order to maximise their fees. They may well have the little captions about not being long terms solutions etc etc but lets be honest, they only say that as they have to.

My take on the whole situation is this: pdls shouldn't be banned. I hate the nanny state attitude and people should have a choice of financial products as much as they should choses whether or not to smoke, drink and other activities which may not be good for them. But, i absolutley believe that more control is needed so that people are no longer exploited. In my humble opinion, there should be a cap on how much you can borrow of say 10% of your wages, deferal of payments should be banned and there needs to be a system where by you can only use one lender at a time. Unlike others, i see no need for the intestes rates to be capped, the market should dictate this. I like to be able to get a pint on a friday night from my friednly pub land lord and i would be seething if someone suggested the boozer should be shut down because drinking is bad for me, but i don't think many people would think he was acting ethically if he rang my alcoholic next door neighbour up at 7 am on Monday morning to ask him if he wanted a snifter or sent him off home with a bottle of gin after a 12 pint session. I see little difference with the current state of pdl lenders.

Sorry this is so long but after a couple of years of experience it is something i feel very strongly about and feel qualified to comment on.

Thanks for reading

OG

sharpy2010

Thanks for taking the time to write all the Gregg! An interesting viewpoint. Of course, anyone that takes out a payday loan(s) is, as you say, the sort of person prone to financial mismanagement; either that or someone who has made mistakes in the past and is trying to make amends, but cannot do so via the route of prime-credit-cards.

Like anything, payday loans are going to be suitable for some, and not for others.

raider

Good post OldGregg1889, thanks for sharing your views.

Sadly, there are a lot of financially lazy people out there (I used to be one), and these companies have been specifically setup to take advantage of that laziness.

OldGregg1889

Yes financially lazy/inept is definitely what I used to be. I definitely had a very short termist attitude to money so pay day loans seemed a god send the first time and hellish from then on. I do think the theory behind a pdl isn't bad but in practice they are irresponsible forms of both borrowing and lending. OG