Has the FCA got the payday loan cap right? Have your say!

Former_MSE_Wendy

The financial regulator has announced details of the long awaited cap on payday loans today and the CEO, Martin Wheatley, wants your views.

Initial cost cap of 0.8% per day. For new loans, or loans rolled over, interest and fees must not exceed 0.8% per day of the amount borrowed.


Fixed default fees capped at £15, which protects borrowers to repay. If borrowers cannot repay their loans on time, fees must not exceed £15.


Total cost cap of 100%, which protects borrowers from escalating debts. Borrowers must never have to pay back more in fees and interest than the amount borrowed.

He says he's confident the FCA has set the cap at the right level to protect consumers. What do you think?

Do you think the FCA has struck the right balance?
What do you think about people not being able to take out a payday loan as a result of a cap?

Please reply with your thoughts below.

If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our Forum Intro Guide.

Read the full MSE News story: Guest comment: Have we got payday loan cap right?

chanz4

Hello provident

shazzablue

chanz4 wrote: »

Hello provident

Hi chanz,how will this affect provident?,will they not find a way round any changes?.

Oblivion

The cap looks sensible to me. Fortunately I have never, nor ever will, have need of a payday loan but for those who do I'm sure it's a welcome move.


The very thought of paying someone interest is anathema to me but then I am an orthodox tight@rse.

bexster1975

Surely any cap is better than nothing. In an ideal world people would receive financial education and payday loans companies would be illegal. In the absence of this, a cap is a start.

Bexster

michael1983l

I believe 50% is a more realistic figure to protect consumers. Also they should think about halting these instant payments and put a 3 day minimum lead time on receiving the payment. Makes the customer think better about weather they really need the loan or not.

grahamji

Out of curiosity what is 0.8% daily as an APR ?????

dwrjones87

grahamji wrote: »

Out of curiosity what is 0.8% daily as an APR ?????

According to my sums, compounded every day, borrowing £100 ends up at £1,818.17 by the end of the year, so that's still 1,818.17% APR

fermi

FidgitsID

Seems like a reasonable set of caps to me
but its just fixing a symptom..
So this will just quickly move the industry onto some other ways of lending money at high rates/silly risks :-(

Pincher

Oops, there is a cap of £200 if you borrow £100.