Payday loan complaints reach five year high

Malthusian

Tarambor wrote: »

He would charge double what was borrowed so to borrow £100 you'd repay £200. When you calculated the interest rate it made him look like bargain of the century compared to payday lenders and indeed many of the comments on the article on their website said the same.

How much did he charge to defaulters? Rather more than legitimate PDLs, I suspect.

There's no point saying "His loans were bargain of the century as long as you don't default" because most payday loan borrowers do default.

Nasqueron

Tarambor wrote: »

There was a case in the Hull Daily Mail a few years ago of a loan shark who got sent to prison. He would charge double what was borrowed so to borrow £100 you'd repay £200. When you calculated the interest rate it made him look like bargain of the century compared to payday lenders and indeed many of the comments on the article on their website said the same. Had he not got a bit lairy with a couple of defaulters he would have probably still had a decent client base who were being provided a much better deal than Wonga et all.

A pay day loan firm even if they charged 3650% would still be less than that unless the loan was over a long period. It depends how long this shark loaned for. A loan for say £500 over 5 days is £50 a day interest i.e. £750 to repay, more realistic numbers for a PDL is half that rate - a £500 loan might cost someone £600 or so total not £1000