Question about early loan payments for a payday loan company

curiousowl

I was unfortunate enough to have to use Payday UK just after Xmas, for a loan of £350 - my credit is not good at all after a disastourous financial time at uni and shortly after, although I am doing my best to repair this now.

I have become in a position to repay my loan 10 days early, so I contacted PDUK and asked about doing this, thinking I may save some money, however they claim they don't allow this, whether I pay now or on the due date, the amount is always the same.

I further challenged this by asking why they advertise on their website about charging APR, and how this can be calculated in real terms if the above happens, the chap wasn't able to give me an answer.

What I have come to ask, if I want to pay early, are they within their rights to still charge me the full interest whack, rather than the time I have used the loan for?

Thanks in advance

C

[Deleted User]

They don't advertise an APR. They appear to have fixed rates for borrowing. £14.50 per £50, payable on next pay day, regardless of duration.

They only show the APR because they're legally obliged to. But of course APR has no relevance for this sort of lending.

So yes, they can charge you what they told you they would.

redpete

If these companies did allow discounted interest for early repayment they would add admin charges to balance it out. For such low value short-term loans it is not worthwhile for them to offer the facility.