Pay Day Lending - is it ever ok?

Apples2

SaLoGo wrote: »

My OH has used them a couple of times.

Once we bought a new TV that was an amazing offer but the offer ended before payday. So OH got a payday loan for about 10 days. Paid it back on payday, all was fine. The amount he paid in interest was nothing compared to the saving we made on the TV! If it hadn't, then we wouldn't have done it.

The other time was to pay for the deposit for our wedding venue. We knew another couple wanted our date and there was no way they were having it! Payday wasn't for 5 days so we got another payday loan. Cost around £25 in interest. Was worth it to secure our dream venue!

We have used them because don't have any savings at the moment while we are paying for the wedding, and we know we can afford to pay the money back without leaving us short.

That's how they are designed to work, for people like you, not by people who have nothing now, and nothing come repayment day but feel they are entitled to extra money

thegoodman

endora wrote: »

The question is, if he hadn't been able to pay you a week later, would you have charged him another £50 to roll over the loan? Would you charge £3 for every time you 'attempt to collect' - up to 100 times in a month? Would you charge 4000% APR?

Herein lies the rub! PD lenders are legalized loan sharks! :mad::mad::mad:

The PD loans are a product, no one is being forced To take them. The reason PD is around because people use them.
You can avoid the PD loans if:
Save a little in good time.
If your income is reduce, woke on reducing the out goings
Try to avoid loans
Only use credit card when you can pay in full

Far too many people are living out side their means and spending on new car on loan, expensive holiday on credit, tv on credit etc.

You can do most things by saving first may need to wait a bit longer to get them.

MCGONIS

endora wrote: »

The question is, if he hadn't been able to pay you a week later, would you have charged him another £50 to roll over the loan? Would you charge £3 for every time you 'attempt to collect' - up to 100 times in a month? Would you charge 4000% APR?

Herein lies the rub! PD lenders are legalized loan sharks! :mad::mad::mad:

Hello, is that what happens with these pay day loan companies? It's just I work in a Social Security Office. You have no idea how many people, each day, tell me all their benefit has been taken the very day that the money goes into their account.

They have nothing to live on for two weeks and need help. I do not know enough about the pay day loan company and have to rely on what the person is telling me.

It seems they take the repayment by debit card and the bank cannot tell the person anything for 48 hours as the debit is pending. Do the loan company keep attempting the debit and charge £3 each time it fails?

I am a bit shocked if that is the case. It must be impossible to get rid of it if you really could not afford it in the first place.

jon1965

MCGONIS, In a nut shell yes, but not are all as bad as each other. They try to take the amount due and if that fails I am told that some will keep trying to take smaller and smaller amounts until they go through thus emptying your bank account.
I don't know about all banks but I know that mine, if pushed, can tell me some details of the pending transaction such as when I noticed an amount for over £200 missing in my available funds, they were able to give me some details only after I assured them several times that I had no idea what it could be.
Some PDL's will even do this when the client has arranged a repayment plan. If you try to be responsible and tell them before they add on charges and charges.
Putting any judgement aside, I borrowed £100 from Wonga but realised that if I payed it back I would have to borrow it again, and again etc so I told them I couldnt pay and wanted a repayment plan. It took them 3 months to agree to the plan by which time my "debt" had increased to over £350 with charges and interest.
Of course I know that A FEW benefit claimants may be trying to pull the wool over your eyes becuase the money has gone somewhere else.
Yes it is shocking how they operate and even more shocking how the lend to people who have no way of paying it back. There are to many people in this country who really do not understand what it is to have NOTHING. No education, no job, no prospects, no support network, nor rich relatives...NOTHING

SaLoGo

They go to take the full amount, then if they can't get it they will take smaller amounts until they get something. For example if you owed £200 but only had £100 in the bank then they would take that £100 and leave you with nothing.

Haha crossed posted!

SaLoGo

jon1965 wrote: »

Of course I know that A FEW benefit claimants may be trying to pull the wool over your eyes becuase the money has gone somewhere else.

But even the ones who are telling the truth only have themselves to blame. The had their benefit, spent it, borrowed some money until payday, can't afford to pay it back, their next benefit pay is gone to the payday loan, then they call the social expecting to be bailed out! Now that, in my eyes, is wrong!!!

jon1965

SaLoGo wrote: »

But even the ones who are telling the truth only have themselves to blame. The had their benefit, spent it, borrowed some money until payday, can't afford to pay it back, their next benefit pay is gone to the payday loan, then they call the social expecting to be bailed out! Now that, in my eyes, is wrong!!!

Sal that is just such an easy cop out, it's their fault so let them get on with it.
Have we failed as a country to educate people in finacial management?
Why did we become such a possesion ridden society?
Ok so yes they took out the loan, but why?
Have you tried to live on benefits for a long time?
Should we protect people from themselves, I know that opens up a whole new discussion, but we already do that, seat belts, crash helmets, etc etc?

One comment you made earlier surprised me, you wanted to pay your wedding venue deposit but didn't have the money as you were saving so hard for your wedding....so why not use the savings to pay the deposit, after all thats what they are there for.
Also the fantastic bargain on the TV, well it must have been a fantastic bargain, they are always on sale and by using a PDL a £400 TV suddenly becomes a £500 one, so not so fantastic

k12479

endora wrote: »

The question is, if he hadn't been able to pay you a week later, would you have charged him another £50 to roll over the loan? Would you charge £3 for every time you 'attempt to collect' - up to 100 times in a month? Would you charge 4000% APR?

Herein lies the rub! PD lenders are legalized loan sharks! :mad::mad::mad:

Herein lies another rub: zxspeccy once lent his mate £50. That's a favour for friend, not a hard headed business decision.

If you rent a car from Hertz, a floor sander from HSS or a hooker from a pimp and keep any for longer than originally agreed, do you think it would be unfair if they charged you extra?

SaLoGo

jon1965 wrote: »

Sal that is just such an easy cop out, it's their fault so let them get on with it.
Have we failed as a country to educate people in finacial management?
I do believe we have. I am a big believer in bringing in financial management as part of secondary school education. Learning more about interest rates and how they work (I still have no clue!) instead of algebra and trigonometry. (which I have never used!)
Why did we become such a possesion ridden society?
Pass?
Ok so yes they took out the loan, but why?
I would imagine that there are a million and one reasons why people take out these loans. I can only tell you our reasons, obviously!
Have you tried to live on benefits for a long time?
Yes I have, as a single parent 14 years ago when all I had to live on was Income Support and Child Benefit. There were no Child Tax Credits back then! I'm pretty sure I was living on around £80 a week (plus £38 HB & £10 CTB paid directly to the council). It was hard and I lived hand to mouth. But I managed. If I couldn't afford something then I didn't have it. Maybe that is why I have the opinion that I do? (and it is just that, an opinion. I'm not 'right or wrong')

Should we protect people from themselves, I know that opens up a whole new discussion, but we already do that, seat belts, crash helmets, etc etc?
Another thread, another time! Too late in the evening for that one

One comment you made earlier surprised me, you wanted to pay your wedding venue deposit but didn't have the money as you were saving so hard for your wedding....so why not use the savings to pay the deposit, after all thats what they are there for.
I didn't say we were saving so hard, I said we didn't have any savings and to be honest we never have. Before we were engaged we were living on one wage so couldn't afford to save. Ok, maybe that's a little lie... we just never saved! Then, we couldn't afford to save because we are paying for the wedding out of every pay. Now, we can afford to save as I started a new job this monday and believe me, I will be saving!
Also the fantastic bargain on the TV, well it must have been a fantastic bargain, they are always on sale and by using a PDL a £400 TV suddenly becomes a £500 one, so not so fantastic
TV was a bargain at the time... not so much now!!! The TV was £700 (and a free Bluray player) down from £1400. He was short by about £200 so that's what he borrowed. (Same with the venue deposit, he was only £300 short) I totally blame the OH because he is what I call a 'brand snob'. He will only buy Sony TV's. No idea why! Me? I had a Beko for years and it was fab!

Maybe it is a cop out, but I do believe that you should live to your means. My OH only used the PDL because he knew 100% that he could afford to pay it back on time.

jon1965

So lets think this through.
I assume this is your thought process.
Because there is a profitable market for pay day loans we should let it carry on unregulated and uncontrolled. It is also the fault of the people who get sucked in to this .
So logically, as there is a profitable market for it we should remove all controls from alcohol sale, cigarette sales and lets not forget Class A drugs. After all a junkie is to blame for his addiction so lets leave em to it, and the drug dealers make a nice healthy profit