Pay Day Lending - is it ever ok?

SaLoGo

My thought process is that you should live within your means. That is it.

endora

MCGONIS wrote: »

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.

I quoted a few stories I've heard over the past year or so, not from personal experience. It all depends on the PDL company, there are so many around and they all behave differently. Not long ago I read a post on another forum about a £1000 loan where, a year later, they were asking for a repayment of £27,000!!!!!:eek::eek::eek:

thegoodman wrote: »

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.

Some are, some aren't. You can't generalize. In theory everything's easy, just like losing weight or quitting smoking, etc. In reality nothing is as simple as that!

k12479 wrote: »

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?

It depends on how much extra. PD lenders charge extortionate amounts. Regulation is long overdue! Yes, it's OK to charge interest but 4000%? It's OK to charge extra for extending the loan but not more than the original loan. It's not OK to raid bank accounts leave people without money for food or rent!

jon1965

Sal
We agree on something yipee
I also believe we have failed as a society to educate our young people. And as each generation moves on the worse it becomes. i am of an age where I could easily be a grandparent and quite possibly a great granparent .
With respect, 14 years ago the levels of I.S. etc were actually much higher in real terms. Inflation for the low paid is much much greater that the RPI or CPI. Most of the basics have gone up way quicker, fuel, food etc.
You have a dig at your OH, well I am sure he has some redeeming qualities or you wouldn't be getting married, but you admit he is a brand snob. It seems he falls for marketing etc and the "must have" attitude of so many people. Personally while I believe you get what you pay for , if all you can afford is a Beko then so be it and if you want quality, wait until it's not cutting edge. E.G why pay £1000 for a laptop when for £500 you can get one that is more than adequate for your needs.

See how complex it is, ok for your OH to take out a loan for a TV but not for someone on a low income to do it?

SaLoGo

jon1965 wrote: »

Sal
We agree on something yipee
I also believe we have failed as a society to educate our young people. I completely agree!! And as each generation moves on the worse it becomes. i am of an age where I could easily be a grandparent and quite possibly a great granparent .
With respect, 14 years ago the levels of I.S. etc were actually much higher in real terms. Inflation for the low paid is much much greater that the RPI or CPI. Most of the basics have gone up way quicker, fuel, food etc. Maybe I could have calculated it if the school had taught me finance management and not algebra! I do understand what you are saying, I was just trying to show that I know how hard it is to be on benefits.
You have a dig at your OH, well I am sure he has some redeeming qualities or you wouldn't be getting married, Of course he does, he was my saviour at a very low point in my life! but you admit he is a brand snob. It seems he falls for marketing etc and the "must have" attitude of so many people. Personally while I believe you get what you pay for , if all you can afford is a Beko then so be it and if you want quality, wait until it's not cutting edge. E.G why pay £1000 for a laptop when for £500 you can get one that is more than adequate for your needs. That I definitely agree with. I would love some Manolo Blahnik Sederaby's for my wedding shoes. They're $755 Can I afford them? At a push yes. Am I going to buy some? No, I got some from BHS on sale at £32! I don't particularly like his way of thinking, but I try and find him the best bargains!

See how complex it is, ok for your OH to take out a loan for a TV but not for someone on a low income to do it? I think it is only ok to take out a loan if you can afford to pay it back. Maybe some people on benefits can afford it?

Why is my message too short? I've written loads!!

SaLoGo

Slightly off subject... how do 'newbies' always manage to spark off the most interesting and heated debates then disappear?!

jon1965

Often cos they go back to live under their bridges.(Isn't that where Trolls live)

I do think a debate is good, and you are , in my opinion , one of the few on here who will debate.

Well done BTW for being smoke free, keep it up. If you do you may be able to reward yourself with those shoes! (I know hardly the money saving ethos but hey, stopping smoking is a big deal and worth treating yourself for)

bris

They should be banned. The problem I see with them is that they spiral out of control until you are caught in a loop that you can't live without them. The problem being each loan has to be slightly bigger to pay the last one with it's interest. It then gets to a stage where it's just to much to handle and the 4000% which wasn't an issue before suddenly kicks in, leaving you owing potentially 1000's for a hundred quid loan.
We see enough on here already that this is happening too, just imagine how many of them there really is.

jon1965

To be honest, much as |I hate them they don't need banning, that's a bit Cag ish . What they need is regulating. Maximum interest rates, max number of rollovers, max charges that can be applied if a payment is missed. Finally some basic credit checks, are you working,what do you get paid, is it permanent (as permanenet as it can be these days), and just how shot is your credit rating.An odd default or missed payment would be ok but 9 defaults and 5 arrangements....well get real

iolanthe07

He was short by about £200 so that's what he borrowed.

But why didn't he just put it on his credit card? I don't understand why people use PDLs when credit cards, even high interest ones, are a much better deal; and if you pay back in full and on time there is no interest at all to pay with a credit card.

lazer

iolanthe07 wrote: »

He was short by about £200 so that's what he borrowed.

But why didn't he just put it on his credit card? I don't understand why people use PDLs when credit cards, even high interest ones, are a much better deal; and if you pay back in full and on time there is no interest at all to pay with a credit card.

Not everyone has credit cards though.