Is a payday loan always a no-no?

Thrugelmir

chriswatts wrote: »

Must say that Payday loan advertising is certainly doing an excellent job on misinformation. I can't believe how people can actually believe ARP doesn't mean anything, the companies have obviously done a good job, sure you don't pay over a full year, but take out one PDL and you'll find that a lot of other sources will soon be closed to you and your reliving on them. Also if you can be charged 35% APR on a credit card, 1000% APR is extortionate even over a month.

There should be a warning placed on their ad's "Warning a payday loan can seriously damage your ability to get credit and a mortgage for six years"

I've signed up to Noddle for the free credit report and there's details of stuff that I've taken out over six years past.

The only way to get rid of these parasites is to compete them out of the market with credit unions, bans just won't work.

Still down to individuals not to spend on non essential items.

What's required is a change in culture.

The UK is besotted with consumerism.

Elvisia

I went to Wilkinsons yesterday to do my Xmas shopping, I teach so I have a lot of kids all asking me for gifts, and I managed to buy little bits in there for 80p each which looked far more expensive. So worth shopping around!

cyclonebri1

randomnut wrote: »

Never get a loan out just to pay for presents for other people.

To be honest a card is all it takes, with a personal message rather than simply signing your name.

The fact you thought about them enough to do that will go miles especially as you're skint for the time being. Friends will understand.

I'll take it back a step further. I belong to an age when cards didn't exist. Why? There was an ethos than you only bought what you could afford (to pay for in cash). We survived and enjoyed Christmas.

Does anyone think we would be in the sheite we are allegedly recovering from, if credit, in whatever form hadn't been rammed down the throats of the last generation or so??

bigadaj

cyclonebri1 wrote: »

I'll take it back a step further. I belong to an age when cards didn't exist. Why? There was an ethos than you only bought what you could afford (to pay for in cash). We survived and enjoyed Christmas.

Does anyone think we would be in the sheite we are allegedly recovering from, if credit, in whatever form hadn't been rammed down the throats of the last generation or so??

I think things have got worse but the root causes have been around for decades. Just look at what appear to be significant numbers of people at retirement having no clue how to repay interest only mortgages, and debt at all ages seems to have got progressively worse over time.

cyclonebri1

bigadaj wrote: »

I think things have got worse but the root causes have been around for decades. Just look at what appear to be significant numbers of people at retirement having no clue how to repay interest only mortgages, and debt at all ages seems to have got progressively worse over time.

Yes, I agree, I almost typed "last 2 generations" in that post,

dzug1

bigadaj wrote: »

I think things have got worse but the root causes have been around for decades. Just look at what appear to be significant numbers of people at retirement having no clue how to repay interest only mortgages, and debt at all ages seems to have got progressively worse over time.

The root causes have been around forever - pawnbrokers were rife in Victorian times and probably before. Pawn your kids shoes for the weekend so they could eat until payday and still go to school on Monday. Or so you could pay the rent, ditto.


I would suspect that (ignoring credit rating effects) a payday loan, paid back on time, is cheaper than exceeding your limit on a credit card or an unauthorised overdraft at the bank.


Still doesn't make it a good idea. Just say Bah Humbug!! with a merry smile.

Naf

YorkshireBoy wrote: »

Payday loans should be avoided at all costs, because the damage they'll do to your credit file will still be there long after you've taken the tree down!

I disagree with this - there are circumstances where a payday loan isn't much of a problem. The biggest problems are caused by people's poor budgeting & not really understanding what they've got themselves into.

In your circumstances, just to pay for some Christmas stuff I wouldn't be inclined to do it - better to ask your bank for a temporary overdraft. Although the cost for £100 will be similar, its easier to manage & pay off. That said, if you budget right, and its the first thing you pay off (i.e. the instant money comes in, not wait until the deadline approaches) it shouldn't cause you any real problems.

dzug1

iolanthe07 wrote: »

The sooner they are banned, the better.

But if they are banned something even worse will step into providing loans to people who can't get them from mainstream lenders. At least Pay Day loan companies don't come round to your house with baseball bats. They need to be regulated, not banned. They do serve a need.

Very true.


Trouble is over regulation will have the same effect - they stop being able to offer loans to the 'worst' cases who turn to the unlicenced lenders who employ the guys with baseball bats


A difficult balance

p00hsticks

dzug1 wrote: »

The root causes have been around forever - pawnbrokers were rife in Victorian times and probably before. Pawn your kids shoes for the weekend so they could eat until payday and still go to school on Monday. Or so you could pay the rent, ditto.

I think the main difference is that then, as you say, the pawnbroker was used in order to avoid starvation and keep a (rented) roof over your head.

Now, the modern day payday lenders seem to be more and more used to just to fund expensive and unnecessary luxuries (christmas presents, holidays, iphones etc)

qwert_yuiop

Plenty of pawnshops opened in the last few years as well.

I'd advise conversion to Eastern Orthodox Christianity. They celebrate Christmas on the 6th of January so you can buy presents in the sales.