Apr 183.2 % !!

Snooze

Got a flyer through the door from Provident Personal Credit. No idea why as my credit rating is fine and I already have numerous mainstream cards etc.

First thing that shocked me was the 183.2 % APR rate which I never even thought possible to be honest!

However, the example they give is confusing me as the figures don't seem to add up unless I'm missing something :

Example:

Cash loan amount £300

56 weekly repayments of £9

Total amount payable £504

Typical 183.2 % APR
--

How can you only be paying back £504 if the APR is 183.2 % ? :huh:

Rob

CheeseCat

I'm not very clued up on these things but is it because you are paying it back over the course of just over a year, and the 183.2% is the amount of interest you are charged over 1 year (hope that doesnt sound stupid!)

It makes (sort of) sense in my head but its hard to explain!

Edit: no I just tried to calculate it and I have confused myself further!! lol

YorkshireBoy

Snooze wrote: »

How can you only be paying back £504 if the APR is 183.2 % ? :huh:

Assumptions, the use of 'effective' APR's, cash inflows, means, medians, IRR's, etc...

http://www.competition-commission.org.uk/rep_pub/reports/2006/fulltext/517_app_3-1.pdf

http://www.competition-commission.org.uk/rep_pub/reports/2006/fulltext/517_app_3-2.pdf

Warning: Heavy reading!

dannynixon

Going back to 183.2%, there was a thread on her about a month ago where someone had taken a small loan of about a few hundred quid and the apr was in the thousands...

PROLIANT

Ah the good old Provy, the only good thing about these muppets is if you dont pay them back as they are not regulated by the FSA, they can't record bad credit data nor can they enforce the debt.

homer_j_3

I saw an advert on facebook earlier today and it was advertising over 4000%

Snooze

Okay, but how does only paying back £204 in interest on £300 work out at 183.2 % ??? That's what I can't get my head around.

Rob

CLAPTON

Snooze wrote: »

Okay, but how does only paying back £204 in interest on £300 work out at 183.2 % ??? That's what I can't get my head around.

Rob

because you are not paying 204 interest on 300 loan for a year.
you are paying 204 interest on a weekly declining balance so after half the year has gone by you only owe about 180 etc.

Riq

homer_j wrote: »

I saw an advert on facebook earlier today and it was advertising over 4000%

:eek::eek:

I have seen these provident adverts on Facebook, but never 4000%!!!

sdooley

thanks clapton I was going to say that

homer_j_3

not sure if it was provident but some other loan shark/knee breaker.. erm I mean reputable high risk loan maker.