Avoid pay day loans!

Treadmill

The MSE forums are rife with Pay Day lender and DCA stooges unfortunately.

worried48

I used Wonga once - for five days, and the cost was less than the "returned direct debit" charge would have been. I can see a use for these loans BUT there are two problems (at least). 1. It seems that as soon as you use one of these, your credit rating is shot, even if you paid the loan back quickly 2. For many users, it becomes something they do every month - much like Provident used to be for many people, and pawn shops before that. For such people the situation they are in gets worse and worse and they find themselves trapped.

meer53

I deal with people who use payday loans every day. They come to me when it has all gone wrong and they need help to get out of the pickle they're in.

To all the people who are saying the PDL companies prey on people on low incomes, explain this - i speak to people on 6 figure salaries who have resorted to payday loans.

It's not irresponsible lending which is the problem, it's irresponsible borrowing.

Taking a long term approach to your finances and budgeting within your means is the way to go. People these days tend to see limits, whether overdrafts or credit cards, as targets which they have to reach, not as something to be used in emergencies.

I know i will be shot down in flames here, but if payday loans are used as they are meant to be used, for the short term and are paid back on time, there's nothing wrong with them.

Swirlygig

Chrissie72 wrote: »

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.

Couldn't agree more Chrissie. If you spend more than you have coming in in Week 1, and borrow to get by you're immediately short in Week 2 when you have to repay. Looking at what you're spending and making adjustments is the only way forward.

Apples2

worried48 wrote: »

I used Wonga once - for five days, and the cost was less than the "returned direct debit" charge would have been. .

Out of interest Worried, there is a growing surge of people calling for the abolition of these companies.

What would you have done at the time if this avenue wasn't available to you?
If you had incurred the penalties for returned DD, how would you have got out of it? It isn't just the bounced fee from the bank, it is the matter of the missed payment to the creditor as well.

worried48

Just ridden it out and incurred the penalties. Fortunately it doesn't happen often, it was the result of taking the word of a customer who claimed she was about to pay by bank transfer (she didn't)

UsetheFORCE

Apples2 wrote: »

Out of interest Worried, there is a growing surge of people calling for the abolition of these companies.

What would you have done at the time if this avenue wasn't available to you?
If you had incurred the penalties for returned DD, how would you have got out of it? It isn't just the bounced fee from the bank, it is the matter of the missed payment to the creditor as well.

I certainly ain't calling for their abolition, just better control of how they do business!!!

dktreesea

I would like to see a limit on the annual percentage interest pay day lenders are allowed to charge, including all their fees.

Do they actually lend to poor people on benefits? I had the impression to get a PDL you need to have a job and evidence of income coming in each week/month?

Ronaldo_Mconaldo

DannyBo wrote: »

They're the devil in disguise, just not in a naughty but nice way.

You'd be better off smoking crack than to deal with any of those 'lenders'

The irony is that many of those people who do go to the Pay Day Loan companies are probably in that kind of financial difficulty due to the amount of crack they have been smoking in the first place.

pvt

dktreesea wrote: »

I would like to see a limit on the annual percentage interest pay day lenders are allowed to charge, including all their fees.

Well why should that be limited to pay day lenders? What about high street banks and their OD interest rates?

What about Claridge's Hotel charging nearly £20 for a 50p shot of Whisky?

I'm gobsmacked at the number of people on this thread totally missing the point that you are responsible for your own actions! Every horror story about PDLs seems to start when a borrower doesn't repay on time, and AS AGREED.

There is a legitimate use for PDL companies that operate within the law. And the outrageous interest rates simply reflect the disproportionately high cost to them of administering a very small value, very short term loan.

Jeez - I never thought I would see myself defending PDL companies on here.............:o