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

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Former_MSE_Wendy
Former_MSE_Wendy Posts: 929 Forumite
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edited 15 July 2014 at 7:54AM in Loans
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.

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

  • chanz4
    chanz4 Posts: 10,940 Forumite
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    Hello provident
    Don't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.
  • shazzablue
    shazzablue Posts: 146 Forumite
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    chanz4 wrote: »
    Hello provident
    Hi chanz,how will this affect provident?,will they not find a way round any changes?.
  • Oblivion
    Oblivion Posts: 20,248 Forumite
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    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. :D
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  • bexster1975
    bexster1975 Posts: 1,576 Forumite
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    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
    michael1983l Posts: 1,916 Forumite
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    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
    grahamji Posts: 5 Forumite
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    Out of curiosity what is 0.8% daily as an APR ?????
  • dwrjones87
    dwrjones87 Posts: 18 Forumite
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    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
    fermi Posts: 40,544 Forumite
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    Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB

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  • FidgitsID
    FidgitsID Posts: 227 Forumite
    edited 15 July 2014 at 10:33AM
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    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
    Pincher Posts: 6,552 Forumite
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    edited 15 July 2014 at 1:12PM
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    Oops, there is a cap of £200 if you borrow £100.
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