Super high interest loans

Hi,

I had a really difficult time last year and took our several small/medium loans as a stop gap. I searched for payday loans as I only needed it for a very short time but couldn’t seem to get anything over less than a few months. However, the interest rates when calculated over a longer period were crippling and I have fallen behind with them. They have now defaulted and I’m unsure if I just need to keep paying at a lower amount per month or if they’ve breached any rules with the high interest rates and I could quote this to get a reduction in interest? I read that payday loans were capped on what they could charge but these loans didn’t seem to be.

The companies are:

Lending Stream £1500 at 325% APR over 12 months (interest £645)

Fund Ourselves £400 over 4 months at 5886.95% APR (interest £304)

Cash ASAP £200 at 1221.9% APR over 6 months (interest £180)

Loans2Go £1000 770% APR over 18 months (interest £2700)

My issue is that with some of these, I’ve already paid the loan back and would now potentially have a long time repayment the rest, which is just ridiculously high interest. 

These aren’t my only debts, so I’m having to juggle the small amount of surplus cash I have, to try to allocate payments. Any advice on the legalities would be a great help.

Comments

  • enthusiasticsaver
    enthusiasticsaver Posts: 15,268
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    Have you got any paperwork for any of them?  There are caps on how much they can charge but I am not sure if they all have to adhere to the cap.  @fatbelly or @sourcrates are more current than me so they will know more.  As you have already defaulted I would not pay any more at this stage until you can ascertain if they can legally claim any more from you.  

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  • fatbelly
    fatbelly Posts: 20,186
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    The interest cap isn't a lot of use. As you have found out, 5886% APR can still be legal.

    https://www.fca.org.uk/news/press-releases/fca-confirms-price-cap-rules-payday-lenders

    The issue is whether these loans were affordable when they were taken out.

    The loans that have defaulted - you can pay them back at a rate you can afford.

    If you feel that you were given loans that you could not afford then there is guidance here

    https://debtcamel.co.uk/payday-loan-refunds/

  • Rob5342
    Rob5342 Posts: 1,330
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    I got some interest refunded from payday lenders by following the debt camel advice and then escalating it to the FOS. You have more chance of getting the complaint upheld if you had many loans in a row or they were particularly large. I had over 30 loans with Lending stream and I got the interest from loan 6 onwards refunded. I was in a huge mess at the time
  • sparks_2023
    sparks_2023 Posts: 156
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    edited 23 January at 9:20PM
    Hi,

    I had a really difficult time last year and took our several small/medium loans as a stop gap. I searched for payday loans as I only needed it for a very short time but couldn’t seem to get anything over less than a few months. However, the interest rates when calculated over a longer period were crippling and I have fallen behind with them. They have now defaulted and I’m unsure if I just need to keep paying at a lower amount per month or if they’ve breached any rules with the high interest rates and I could quote this to get a reduction in interest? I read that payday loans were capped on what they could charge but these loans didn’t seem to be.

    The companies are:

    Lending Stream £1500 at 325% APR over 12 months (interest £645)

    Fund Ourselves £400 over 4 months at 5886.95% APR (interest £304)

    Cash ASAP £200 at 1221.9% APR over 6 months (interest £180)

    Loans2Go £1000 770% APR over 18 months (interest £2700)

    My issue is that with some of these, I’ve already paid the loan back and would now potentially have a long time repayment the rest, which is just ridiculously high interest. 

    These aren’t my only debts, so I’m having to juggle the small amount of surplus cash I have, to try to allocate payments. Any advice on the legalities would be a great help.
    1 month payday loans are capped now - but short term "payday-ish loans" are not.

    Please post this question on the debt camel payday loans comments after the payday loan article. You'll get good and realistic advice.

    Remember even if you make the payments to a loan it can still be "unaffordable" if you can't then pay other priorities or have to then take out further borrowing because all your cash has been taken by the loan repayments.

    The easiest claims to win are revolving borrowing. For instance on payday I used to settle my Ferratum, 247 MoneyBox and CashAsap loans in the morning and then had to frantically reapply to each of them to get the money to pay other borrowing repayments on the following day. Etc. Etc. It was a never ending mess ( well it did mostly end in the end when I got a massive unaffordable lending claim rebate from SafetyNet Credit ).


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