Pay Day Lending - is it ever ok?

KingElvis

^^ iolanthe07, I didn't mean the institution of Holy Matrimony is tat, just the way some people execute the way to it.

Let's be honest, if you're poor, on the limits should you be wasting money on an expensive wedding? far better to buy within your means even if that means dripping sandwiches down the Dog and Duck.

I honestly can't get it in my head why anyone would hock themselves into a very high interest loan to buy say a shonky mobile phone....but they do.

Duke203

Continuing with the shiny phone example.

I want the newest iphone 6BS (or whatever it is) and it costs a million quid. Is it okay for me to buy it with my own money?

Unfortunately I haven't got £1m to buy it, but my mate Dave has. He's going to lend it to me over 10 years with no interest (Nice chap!) so would this still be a good/bad purchase? What about 10% interest, or even 1000%? Why is the more expensive option considered such a mega-evil, when people don't seem to give a hoot about a CC @16%.

Actually, it's a normal phone, and Dave's going to give me the 50 quid I need to buy it if I get him a pint when I pay him back on Monday. Just out of interest, what would the APR be on a £50 loan over 3 days with a £3 charge? More than Wonga?

Payday loans have a bad rep. Financially illiterate borrowers have too. When you bring them both together, then you're going to have interesting opinions. I appreciate the freedom of having the option to buy something very shiny with 15 minutes notice, but I think I'll still save for it as I have that option too

SaLoGo

KingElvis wrote: »

Yes, but the damage those pay day loans do to your credit history are horrendous...once your dream wedding is over and if you later want a mortgage or a proper loan or credit card these things will come back to haunt you like a dead bat hanging round your neck.

Serious lenders see payday loans as a sign you cannot budget, you cannot live within your means and you're financially baffled.

Sorry but those are the facts.

If you care not for your long term credit history (and six years is a long time if you can't wait a week for a tv set) then I suppose they can be useful.

We don't have or need a martage and never will. We don't do 'proper' loans. What would I need one for? House is perfectly adequate, I drive a V reg Astra I'm very happy with so no new car needed, we go on cheap last minute holidays and we are paying for our wedding out of each month's pay.

We are very capable of living within our means. Not that it's anything to do with you, but we pay our bills, pay some of our wedding off, and still have plenty left over each month. We happened to be short one month after booking a last min holiday then my OH bought my engagement ring and it was before I was working. I think I am not 'financially baffled'... I don't do credit cards because I know I would be too tempted etc. I don't do 'proper' loans so am not stuck paying for something I had a few years ago.

I really don't care what 'serious' lenders think of me... my credit rating is probably crap anyway because I don't do credit! And besides, they were in my OH's name anyway. And don't give me all the 'you're financially linked' BS because we're really not!

Is it so hard to understand that we felt (and still do) that it was the right thing to do for US?)

SaLoGo

Derivative wrote: »

Freedom of choice - is it ever ok?

Obviously not!


*Apologies for the separate quotes, can't get the mulitple quote thingy to work!!

SaLoGo

KingElvis wrote: »

I would imagine if it goes before an underwriter he will run from the room screaming....payday loans shout "I don't earn enough for my lifestyle" and "I live beyond my means"

That's my opinion, take it or leave it.

And that's just what it is... an opinion. It doesn't mean you're right and I'm wrong or vice versa.

SaLoGo

KingElvis wrote: »

Let's be honest, if you're poor, on the limits should you be wasting money on an expensive wedding? far better to buy within your means even if that means dripping sandwiches down the Dog and Duck.

I really hope that isn't aimed at me?

Apart from using a PDL to secure the venue (which I am now fed up of defending!) we have been very sensible about it all. We booked it 22 months in advance so that we have plenty of time to pay for it without resorting to borrowing for it. It is my dream wedding, but it is by no means an extravagant wedding. We are having what we know we can afford and I do have a realistic budget which is being stuck to.

I know plenty of people who have had 'proper' loans just so they can get married sooner rather than later, then the loan caused issues in their married life. I would rather do it my way, taking our time to pay for it.

iolanthe07

SaLoGo wrote: »

I really hope that isn't aimed at me?

Apart from using a PDL to secure the venue (which I am now fed up of defending!) we have been very sensible about it all. We booked it 22 months in advance so that we have plenty of time to pay for it without resorting to borrowing for it. It is my dream wedding, but it is by no means an extravagant wedding. We are having what we know we can afford and I do have a realistic budget which is being stuck to.

I know plenty of people who have had 'proper' loans just so they can get married sooner rather than later, then the loan caused issues in their married life. I would rather do it my way, taking our time to pay for it.

I don't think anyone is having a pop at you; the thread has just turned into a general discussion. Enjoy all the planning for your wedding, and have a great day when it comes.

stuart30

opensomehours wrote: »

The thing to remember is the the APR is representative. These loans can actually be worthwhile if managed correctly as mentioned. For example, if you have a bill that needs paying and you don't have the cash, and the bill will get you an overdraft charge, then in some cases a payday loan can be cheaper than the over draft charge.

Be selective in who you choose.

For example, I wouldn't use Wonga, as they seem to be advertising all over the place and who pays for that?

I would use the likes of ferratum.co.uk as they seem like a more trust worthy responsible lender, with similar APR.

Just be sensible when it comes to managing the loan. Pay it off before the end of the agreement terms and you should be fine.

I was of the same opinion...but after actually checking and then taking a loan (think its was £120 for 10 days..paid £10 ish interest)...to be honest if i borrowed that from a mate id insist on giving them £10/£15 as a thanks (couple of pints down the pub).
So if these loan"s are taken out and paid when agreed the interest is actually very good.:beer:

jon1965

I have a credit file littered with PDL's and PDL default notices. I am not working (haven't been for a year-not through choice) and yet my Bank has just given me a £650 overdraft facility but I couldn't get a PDL for love nor money. Go figure...but do you call an O/D proper credit?

endora

jon1965 wrote: »

I have a credit file littered with PDL's and PDL default notices. I am not working (haven't been for a year-not through choice) and yet my Bank has just given me a £650 overdraft facility but I couldn't get a PDL for love nor money. Go figure...but do you call an O/D proper credit?

Well yes, as it's from a mainstream lender and likely to have a lower APR an less hassle than a PDL.

I've got an O/D, maybe I should ask for an increase to see what Satan's Den says, I never defaulted on my Satan's loan, paid it off in 2011 :A:A:A