extortionate short term loans

llifor

Is there anything that can be done about the extortionate short term loan companies that are advertising everywhere at the moment. They are quoting 4214% APR. How can this be so acceptable and legal? Would appreciate some feedback to know where to start.

poppasmurf_bewdley

Want to know where to start where?

Getting these firms banned, or adding to their profits by taking out a loan with them?

ILW

Just don't borrow money from them if you don't like the price. Very simple.

chalkie99

The APR is largely irrelevant.

The rate you are quoting appears to be for Wonga and, if you were desperate for £100 for a week then it would cost you £12.78 in interest and fees.

Now, I am no fan of Pay Day loans and would never use one but for some people that might be cheaper than going into an overdraft or incurring a missed payment penalty elsewhere.

If you stick around here a while you will see just how many people don't repay, invent thefts of their bank cards and every other excuse why they can't repay.

£12.78 to go through the admin, supply the money and then wonder if you will see it again ...... depends how you look at things.

Used responsibly they can have their place. the APR is a red herring.

molerat

poppasmurf_bewdley wrote: »

Want to know where to start where?

Getting these firms banned, or adding to their profits by taking out a loan with them?

Getting them banned will only lead to the return of Big 'Arrys Loans down the pub. His doorstep collectors are a lot less amenable than those of even the worst payday loan companies. The mainstream lenders will not take on these customers and for small loans will probably not be much cheaper and some overdrafts and missed payment fees are dearer than payday loans. If used correctly these companies have a place but need better regulation. Removing their adverts from TV would be a good start.

AMILLIONDOLLARS

Must be some of the money George has just given to the banks!!


AMD

poppasmurf_bewdley

molerat wrote: »

Getting them banned will only lead to the return of Big 'Arrys Loans down the pub. His doorstep collectors are a lot less amenable than those of even the worst payday loan companies. The mainstream lenders will not take on these customers and for small loans will probably not be much cheaper and some overdrafts and missed payment fees are dearer than payday loans. If used correctly these companies have a place but need better regulation.

I'm not saying they should be banned. What I asked was 'what does the OP want?' as he wasn't clear in his post. He mentioned banning them and their extortionate interest so I assumed it was one or the other.

I agree that if used correctly, these companies have a place. I also agree that they need better regulation.

Conrad

Why then don't all the caring folk, such as left leaning well off celebs and pundits that complain about this, set up a nice cheap payday lender?

I'll tell you why, because it would fail and go bust.

When lending over short terms, it is only economic when super high rates apply. People forever complain that employees should be paid more and have longer paternity pay and all sorts of rights, well, that all costs a lot of money, hence lenders costs are considerable.

We lend our own money on a secured basis over 6 - 12 month terms, and what people have to understand is we could just leave that money in ISA's or stick it into buy to let property for a pretty safe (for us) return. Offering to lend people money over short terms is a considerable risk so the returns have to be such that the whole excercise is overall more worthwhile than leaving money sitting in nice safe investments.

If anyone thinks this is unfair, be my guest and start lending your own savings.

Apples2

It only becomes unfair when they accidently "lose" their bank cards and get grumpy when that interest rate becomes all too real.

They are queueing up to take them out, the queue to pay it back is not quite so long.

DCFC79

llifor wrote: »

Is there anything that can be done about the extortionate short term loan companies that are advertising everywhere at the moment. They are quoting 4214% APR. How can this be so acceptable and legal? Would appreciate some feedback to know where to start.

Its acceptable becuase it is and people use them.
Its legal because it is.

Where to start would be dont enter the pit of damnation, get a grip on your finances.

dealer_wins

llifor wrote: »

Is there anything that can be done about the extortionate short term loan companies that are advertising everywhere at the moment. They are quoting 4214% APR. How can this be so acceptable and legal? Would appreciate some feedback to know where to start.

Its the same as the "we buy any gold" "we buy your mobile" "had an accident in the last 3 years" ads

All a rip off, all aimed at gullible people, all best avoided!!

If ads are bothering you then watch BBC1only and install an ad-blocker on your pc (and dont go out)