Loans2Go question

John_

eLdn123 said:

DrEskimo, would love to pay it in full, but there is no way I could get over 2000£. 1000£ is something that I can sort, looking at it from a point of view that making around 100% in profit, should be something any company would like in under a year.

Why would your opinion on how much profit a company should make feed in to your calculations, and how have you managed to go from APR to profit? What delinquency rate have you used, costs, financing etc?

eLdn123

John_ said:

eLdn123 said:

DrEskimo, would love to pay it in full, but there is no way I could get over 2000£. 1000£ is something that I can sort, looking at it from a point of view that making around 100% in profit, should be something any company would like in under a year.

Why would your opinion on how much profit a company should make feed in to your calculations, and how have you managed to go from APR to profit? What delinquency rate have you used, costs, financing etc?

My comment was based on the general simplication that in case of loans, interest is considered as profit on a loan, so not gross profit, therefore paying 100% over the initial principle, is usually considered a fairly good profit.

When you take into account addtional costs, such as financing or labour associated costs, you are actually getting the GP. We can surely get into more technicalities, but I do not believe that your comment was warranted, as you, and everyobody else understood what I meant to say.

If you want we can also look at this as an investment, although don't think a lot of companies tend to view it as such. If we view it as a investment, again, if we try to take into account potential costs associated with an investment of 1000£, payment within 9 months of 2000£, could translate into a ROI of 100% in under 1 year, great ROI to be honest.

Since it is an online platform, the costs associated with this are fairly low compared to a brick and mortar store loan, so again, if you want to go more technical, the assumption could safely be made that the costs associated are not very high, in order to require such a return.

eLdn123

John_ said:

eLdn123 said:

DrEskimo, would love to pay it in full, but there is no way I could get over 2000£. 1000£ is something that I can sort, looking at it from a point of view that making around 100% in profit, should be something any company would like in under a year.

Why would your opinion on how much profit a company should make feed in to your calculations, and how have you managed to go from APR to profit? What delinquency rate have you used, costs, financing etc?

FYI - I admited that I made a mistake in taking this loan, but if you want to be technical about words used it is your choice. If I was in your shoes, I would have explained what I believed was a mistake, and provided a suggestion, rather than question out in order to, as it looks to me, make a point of being smarter. I was expecting on the forum to receive support and advice, which some posters have provided, for which I thank them.

I honestly can not understand, how some can support a company taking advantage, as I've clearly said, I'll try and sort it out somehow, but other who may have a worse situation and potentially worse mental health can make a similar bad decision and find themselves unable to cope.

Sparkl3

hello OP, did you get this loan sorted? I’d just like to say, I borrow £300 off them last year and was astounded by them wanting £1200 back. I stupidly assumed I could pay it off early but they still want ridiculous amounts to even do that. I emailed them, saying they were preying on the vulnerable, I offered them a token payment of £50 for the convenience of a loan and offered to pay the £300 (I’d already paid £140) and they replied wiping £964 of interest and only want me to repay the amount borrowed. I begin my instalments to pay £160 next week and it will be paid monthly. I was very surprised, but I did threaten complaining to the ombudsman so not sure if this helped. I hope you get sorted.

[Deleted User]

eLdn123 said:

John_ said:

eLdn123 said:

DrEskimo, would love to pay it in full, but there is no way I could get over 2000£. 1000£ is something that I can sort, looking at it from a point of view that making around 100% in profit, should be something any company would like in under a year.

Why would your opinion on how much profit a company should make feed in to your calculations, and how have you managed to go from APR to profit? What delinquency rate have you used, costs, financing etc?

FYI - I admited that I made a mistake in taking this loan, but if you want to be technical about words used it is your choice. If I was in your shoes, I would have explained what I believed was a mistake, and provided a suggestion, rather than question out in order to, as it looks to me, make a point of being smarter. I was expecting on the forum to receive support and advice, which some posters have provided, for which I thank them.

I honestly can not understand, how some can support a company taking advantage, as I've clearly said, I'll try and sort it out somehow, but other who may have a worse situation and potentially worse mental health can make a similar bad decision and find themselves unable to cope.

Most high cost credit companies are going bust because they don't make a profit - even at the high interest rates, a lot of customers default the loan and don't pay it back. 
Of course, a lot of these companies didn't ask questions about abilities to repay, but I expect when asked about the purpose of the loan you didn't say gambling. 
The way things are going, there will be no credit options for people with less than perfect money management, but perhaps that's not a bad thing. 

eLdn123

Sparkl3 said:

hello OP, did you get this loan sorted? I’d just like to say, I borrow £300 off them last year and was astounded by them wanting £1200 back. I stupidly assumed I could pay it off early but they still want ridiculous amounts to even do that. I emailed them, saying they were preying on the vulnerable, I offered them a token payment of £50 for the convenience of a loan and offered to pay the £300 (I’d already paid £140) and they replied wiping £964 of interest and only want me to repay the amount borrowed. I begin my instalments to pay £160 next week and it will be paid monthly. I was very surprised, but I did threaten complaining to the ombudsman so not sure if this helped. I hope you get sorted.

I did not resolve anything with them yet, just a payment plan until things get resolved on my side from a financial perspective. After I will be in a better position, will try to leverage some amounts and get this closed.

eLdn123

camelot1971 said:

eLdn123 said:

John_ said:

eLdn123 said:

DrEskimo, would love to pay it in full, but there is no way I could get over 2000£. 1000£ is something that I can sort, looking at it from a point of view that making around 100% in profit, should be something any company would like in under a year.

Why would your opinion on how much profit a company should make feed in to your calculations, and how have you managed to go from APR to profit? What delinquency rate have you used, costs, financing etc?

FYI - I admited that I made a mistake in taking this loan, but if you want to be technical about words used it is your choice. If I was in your shoes, I would have explained what I believed was a mistake, and provided a suggestion, rather than question out in order to, as it looks to me, make a point of being smarter. I was expecting on the forum to receive support and advice, which some posters have provided, for which I thank them.

I honestly can not understand, how some can support a company taking advantage, as I've clearly said, I'll try and sort it out somehow, but other who may have a worse situation and potentially worse mental health can make a similar bad decision and find themselves unable to cope.

Most high cost credit companies are going bust because they don't make a profit - even at the high interest rates, a lot of customers default the loan and don't pay it back. 
Of course, a lot of these companies didn't ask questions about abilities to repay, but I expect when asked about the purpose of the loan you didn't say gambling. 
The way things are going, there will be no credit options for people with less than perfect money management, but perhaps that's not a bad thing. 

To be fair I'm ok with not having the ability to get any loans after I sort out the debt I currently have. Maybe a mortgage if I would decide to remain in the UK in the next 5-10 years, but nothing else in the short term from my perspective would be worth getting a loan.

MinuteNoodles

Sparkl3 said:

 I borrow £300 off them last year and was astounded by them wanting £1200 back.

Why were you astounded by them wanting £1200 back? The figures were on the agreement for you to see before you signed for the money so you knew how much you'd be repaying in total before the money hit the bank. 

The reason the interest is so high is because the people they're lending to are very very high risk and they have to cover a lot of loans which are never repaid so they do that by having sky high interest rates.

Lamplighter

eLdn123 said:

[...]

Also would like to question regarding High Cost Short Term Credit legislation. The legislation states that a HCSTC is considered a loan which is due to be repaid or substantially repaid within 12 months. Would we not have 2 situations in this case :

1. The company is bypassing the definition by having a mandatory timeline of 18 months for the loan ( as I've said it can not be changed ) , case in which the definition is clearly gamed ? Also, if the actual principle is being paid within the final 6 months of the agreement, would it not be caught by the definition ( "substantially repaid" )

2. If a request is made for early repayment, which falls within 12 months from the loan start date, would it again not be caught by the definition ? As with the early repayment, it would again potentially fall under the wording of the defintion.

Hi there
I have a Loans2Go question.  The issue was raised in this thread last month, but was not pursued in the replies - hence I'll resurrect rather than create a new post.
The company offers very high interest loans for periods beyond 12 months, and (regrettably) I have a loan currently outstanding - £1,500+ over 24 months, which would require me to pay over £6,000 over the 2-year term.
I am two months into this crazy product, and need to buy my way out - I am not in any arrears, and in fact I have already made an additional payment.
I took a previous loan of £250 over 18 months, which I paid back about 7 weeks after taking it out (total repaid around £380).  Checking back, I noticed the amount paid represented more than the 0.8% daily interest cap regulated for high-cost short-term credit loans, even more so as the capital was reduced by the first instalment.  I assume this is in some way a consequence of the "front loading" of the interest.
I can envisage the same happening in the calculations for the repayment of my current, larger loan.
Therefore my question, as was part of the OP's question - by offering only terms greater than 12 months, does Loans2Go avoid the interest caps for short-term high-interest loans?
I am happy to repay what I borrowed, but want to minimise my exposure to interest.  Do I have a case to contact them suggesting they are in breach of the regulations by charging excessive levels of interest?
Thanks for your opinions and guidance.

[Deleted User]

There is never any "front loading" of interest.

You didn;'t take out a short-term loan but a regular one with a high APR. There's no breach.

The sooner you settle the loan, the more you will save. However you will inevitably pay more than you borrowed.