Payday loans from Moneysupermarket.com

gmullan

Just got this email from I site I previously respected and I think it's outrageous!!

http://www.moneysupermarket.com/payday-loans/

As a site promoting themselves to find the cheapest loan, how can the promote loans at 1286.1%?!?!?!

Dylanwing

If £25 for £100 is 'outrageous', what does that make the fees charged by your Bank for exceeding an overdraft by that amount? Not cheap, but they serve a purpose, and can be very useful in an emergency.

paul.wilson_3

Hi Gmulan.

I saw your post on Payday Loans, and as I work on the loans channel at moneysupermarket.com, thought I'd drop you a reply.

Payday Loans are a short term credit product, in fact the max loan term is 31 days. As they're a consumer credit product Payday loans are governed by the same rules and regs as Credit Cards or a standard loan, which means they have to display an APR. APR's are calculated on an annual basis, which makes the resulatant APR on a Payday Loan very high because the max term is a month.

As per Dylanwing's comment Payday Loans serve a purpose for people in need of cash for a short period. Definately not one for the longer term where a standard un-secured loan will be a much better option. The cheapest Un-secured loan available through moneysupermarket.com is currently 6.3% from Your Personal Loan (part of Co-Op bank). Payday Loans are for small amounts from £80 - £800 (typically) and repayable (in full) on your next pay day, very different to an un-secured loan and why the APR's are so different.

Feel free to post me a reply if you've any other thoughts or questions.

Cheers, Paul