Avoid pay day loans!

Determined_diva

Yes you are right chrissie, I've said my piece now and been totally honest with what I borrowed/paid back. If I can help one person make the right decision then my list was worth it, but feel like this thread is becoming a judgemental one rather than a helpful one so I am going to bow out now knowing that I am free of these !!!!!!s!

Happy 2013 to you Hun

DDx

Chrissie72

Happy new year to you too And it would be nice if people would take heed of your advice, but I fear not many will listen, as payday loans are so easy to get, and people rarely listen to good advice and prefer to do what the hell they want.

If someone's short in the middle of September (for example) then what makes them think they're not going to be short at the end? Absurd, backward thinking. People need to learn how to budget, and not borrow money they cannot pay back. If they don't have 'enough' to get by, then they need to seek advice, and find out if they are getting all the benefits they're entitled to. Payday loans are not the answer.

harrys_dad

One other problem with Payday loans is that they insist on Continuous Payment Authority, which means that they have the power to take whatever is available out of your bank account whenever they wish, assuming it is up to the amount you owe.

They are designed to be paid back within a few days so the interest does not mount up (which is how they justify their exorbitant rates). Unfortunately, as has been stated in other posts, people only use them when they are unable to get credit elsewhere. The most likely scenario is that of the OP, and that although they borrow for an emergency the interest means they cannot afford to make the payment when it is due as they do not have the spare income, and hence more interest is added, and so it goes on. Once you are in that cycle you cannot get out (see the debt free wannabe boards for countless examples).

Another problem is that once you have taken out a payday loan your credit file is such that no-one will ever lend you money for another six years, except another payday lender.

People on benefits used to be able to get crisis loans to help them in a crisis, but they are virtually unobtainable now. When faced with a choice of paying the electric bill or buying desperately needed new shoes for a five year old people often get sucked into the clutches of payday lenders to put off the evil day of reckoning. Believe me, that day will always arrive once you get in that cycle.

jatropha

Payday loan companies are parasitical on the low-paid. They are in many cases no better than loan sharks, because they abuse Continuous Payment Authority to take payments even when debtors are down to the bare minimum needed to survive. This practice is widespread.

They have filled the gap created by the rolling back of the Social Fund/Community Care Grant etc - but never confuse them as saviours of the poor. The people who turn to them are making a forced choice.

Chrissie72

jatropha wrote: »

Payday loan companies are parasitical on the low-paid. They are in many cases no better than loan sharks, because they abuse Continuous Payment Authority to take payments even when debtors are down to the bare minimum needed to survive. This practice is widespread

Well said, and this is why need to be outlawed.

Treadmill

Payday loan company's tend to be run by cowboys not bright enough to earn an honest living without having the 1000%+ margins, they wouldn't last five minutes in any other industry.

dresdendave

Chrissie72 wrote: »

Unbelievable! :eek: The worrying thing is, that I actually think you believe what you're saying. It makes me feel like losing faith in humanity when someone actually supports payday loan companies, with their horrific interest charges and their 'continuous card payment' method of payment in the bank that you can virtually NOT stop. Just wait until you cannot pay them one month. And the interest sky rockets. Will you be so supportive of these dreadful loan companies then?

I think you have completely misunderstood my post. I was not supporting Payday lenders but pointing out the reality of what would happen if they were banned. People use PDL's because they can not get mainstream credit. For those with bad credit who fail to budget or save but suddenly find they need/want a quick loan, please tell me who they could turn to if there were no PDL's?

That is why I made the point about educating people in managing their finances. The way to defeat Payday Loan Co.s is to reduce the demand for their services due to less people requiring their loans.

By banning them you are just feeding their current client base to the genuine loan sharks.

Please do not worry about me not being able to pay them one month. I have always lived within my means and put a bit away in savings each month. When I have an emergency such as a boiler/car repair bill I pay with my savings, not by borrowing money and then blaming the loan Co when I can't repay it.

Chrissie72

Here's a story for people who think the payday companies are OK etc etc....

My neighbour's brother took out one of these loans last year, (about £500,) and he gave his home number when he applied. He paid OK for a few weeks, and then was hospitalised for a few weeks after he took out the loan, after a car accident. He was in a coma for several weeks: the bills did not get paid, and he wasn't getting paid from work as he was working for a temp agency. So the finances went all ski-whiff.

His bank account soon emptied, and as it was a basic account, the loan company couldn't get any money as there was no overdraft.

6 weeks after his accident, he died. The day after his death, my neighbour who (was in his flat with his grieving partner and their little son,) took a phone call. It was the payday loan company, asking for him, (chasing the money obviously.)

My neighbour (his sister,) said he just died several weeks after a car crash. The guy on the phone simply asked who was dealing with his finances now!!! :eek:

I can't put on this forum what she said to him.

All they cared about was getting their pound of flesh.

Scum. Pure scum.

opinions4u

they abuse Continuous Payment Authority to take payments even when debtors are down to the bare minimum needed to survive. This practice is widespread

Chrissie72 wrote: »

Well said, and this is why need to be outlawed ...

I am no fan of PDL companies.

But you appear to be saying that their practice of collecting money contractually owed should be outlawed.

I find that strange.

Chrissie72

I posted my post above ^^^ before I read your last post dresdendave. Apologies for misunderstanding you.

Also, I didn't mean to refer to you personally. Badly worded. Sorry.