MSE News: Which? wants payday loans clampdown

"Borrowers who find themselves locked out of mainstream credit are drowning in a vicious cycle of high-cost loans..."
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Which? wants payday loans clampdown

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  • Wywth
    Wywth Posts: 5,079 Forumite
    edited 4 March 2013 at 12:00PM
    It wants the FCA to: ...

    Toughen rules to make sure proper affordability checks are carried out.

    Similar action worked wonders for mortgages, for example :cool:

    If people could ever properly afford payday loans, they wouldn't ever need them. At least they are regulated, as opposed to 'Lending Len' you can find in the Red Lion.
  • Treadmill
    Treadmill Posts: 1,102 Forumite
    Lending Len was cheaper though, loan sharks usually asked about 2% a week. I would imagine they kicked themselves for missing a trick when they saw what Wonga etc charged.
  • antrobus
    antrobus Posts: 17,386 Forumite
    Treadmill wrote: »
    Lending Len was cheaper though, loan sharks usually asked about 2% a week. I would imagine they kicked themselves for missing a trick when they saw what Wonga etc charged.

    Yes, but 'Lending Len' doesn't have to factor in the cost of bad debts.:)

    I've heard it said that (for example) the rates of interest charged by that organised crime organisation in the USA which we cannot name can be quite 'reasonable'. That's because the default rate on such lending is zero. You will repay them in full. They do not write off any debts.
  • Wywth
    Wywth Posts: 5,079 Forumite
    edited 4 March 2013 at 1:12PM
    Treadmill wrote: »
    Lending Len was cheaper though, loan sharks usually asked about 2% a week. I would imagine they kicked themselves for missing a trick when they saw what Wonga etc charged.

    You must know a different one to the one I refer to.

    The one I knew never understood percentages and things like that.
    His lending terms were If I give you a tenner this week, I want a tenner back next week, and the week after, and the week after that, and if he was short one week (perhaps to lend to another sucker?) then perhaps he'd charge £20 if he thought you could be squeezed for that too. :eek:

    If, of course, you were unable to afford his weekly payment, well he was a reasonable chap and would usually be happy to lend you some more at perhaps "slightly" higher terms as you had already proved how bad a credit risk you were to him. ;)
  • molerat
    molerat Posts: 31,562
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    Be careful what you wish for Which? If lending Len comes back horse meat may not be the only thing found in your burger ;)
  • AAAAA
    AAAAA Posts: 272 Forumite
    I believe in a free market.Lenders should be able to charge whatever interest rate they want
  • Consumerist
    Consumerist Posts: 6,310
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    edited 4 March 2013 at 7:11PM
    AAAAA wrote: »
    I believe in a free market.Lenders should be able to charge whatever interest rate they want
    Are those the words of two and a half drunks?
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
  • safestored4
    safestored4 Posts: 464 Forumite
    A really constructive comment Consumerist. Now would you care to explain to us why you object to free markets.
  • ChopperST
    ChopperST Posts: 1,257
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    edited 6 March 2013 at 11:17AM
    Here we go another Daily Mail style thread, payday loans are the antichrist!

    Used appropriately they are a sensible way to borrow SHORT TERM however. People need to take more responsibility for their own actions and decide on affordability prior to committing.

    We are led to believe that these loans are exclusively for people who have the wolf at their door. I wonder how many use them for an ipod or a holiday. I can name several friends who have, who earn good money but borrow instead of saving.

    We need to wake up as a country and become more accountable as individuals rather than blaming everything and everyone other than ourselves!

    Take my signature for example. I want to buy a new house. I could buy it now and take on a massive debt at 95% LTV or I could go without and save more to have a more affordable mortgage, that means going without a holiday or a night out and saving, which people seem to have forgotten is an option as well as borrowing!
  • Consumerist
    Consumerist Posts: 6,310
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    ChopperST wrote: »
    . . . We are led to believe that these loans are exclusively for people who have the wolf at their door. I wonder how many use them for an ipod or a holiday. I can name several friends who have, who earn good money but borrow instead of saving.
    I thought payday loans are supposed to be short-term loans. Why would someone borrow for a month to pay for an ipod or holiday?
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
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