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    • Millie Millsters
    • By Millie Millsters 25th Nov 11, 11:03 AM
    • 170 Posts
    • 166 Thanks
    Millie Millsters
    • #2
    • 25th Nov 11, 11:03 AM
    • #2
    • 25th Nov 11, 11:03 AM
    I say include them, then you can get all the warnings in. Otherwise, where do you draw the line at not mentioning companies/industries that you disapprove of?
  • 2sides2everystory
    • #3
    • 25th Nov 11, 11:03 AM
    • #3
    • 25th Nov 11, 11:03 AM
    No ... and if that isn't long enough ... No
    • gailey
    • By gailey 25th Nov 11, 11:16 AM
    • 2,303 Posts
    • 17,249 Thanks
    gailey
    • #4
    • 25th Nov 11, 11:16 AM
    • #4
    • 25th Nov 11, 11:16 AM
    I have to say from experience they have their place.

    as bank wont extend overdraft even short term
    we have no savings
    bank charges so high 35quid per transaction.

    I think as you dont borrow more than you can pay back
    that you not locked in a cycle we maybe done it 3-4times this year not every month.
    often for us its cashflow hubby has decent sized wage its just of car/appliance goes wrong ect.

    last time used quid quid and went through quidco for cashback.
    sometimes they send discount codes.

    Dont think they any worse than littlewoods with their 44%interest rate telling kids santa doesnt exist on their xmas ads and encouraging people to get into huge debt buying extravagent gifts.
    pad by xmas2010 £14,636.65/£20,000:
    Pay off as much as I can 2011 £15008.02/£15,000

    new grocery challenge £200/£250 feb

    KEEP CALM AND CARRY ON,Onwards and upward2013
    • dacman
    • By dacman 25th Nov 11, 12:25 PM
    • 50 Posts
    • 1,773 Thanks
    dacman
    • #5
    • 25th Nov 11, 12:25 PM
    • #5
    • 25th Nov 11, 12:25 PM
    I think that you should include a guide to these payday loans. Although I'm fortunate enough to have never had to use them myself I can see that there are circumstances where a short term loan could genuinely help somebody out.

    I'd argue that the real problem is a lack of education of what taking out a short term loan could mean to someone. Martin has been vocal in lobbying for compulsory financial education in schools and I don't see why that same sentiment shouldn't extend to the wider populace. The real danger in these types of loans is surely due to a lack of understanding of them and by adding an MSE guide to them then Martin is helping educate which must be a good thing.

    I'm sure that any guide would come with warnings and alternatives to using them but for situations where they may be the only option it is foolish to bury your head in the sand and not advise people on whatever is the best of a bad bunch. As an additional section, maybe a couple of real-life case studies of how to use pay day loans efficiently and safety and, more importantly, how NOT to use them could be included with the guide.
  • antonia1
    • #6
    • 25th Nov 11, 12:34 PM
    • #6
    • 25th Nov 11, 12:34 PM
    I vote to include them. I always understood that this site is about the best ways to save money. Like it or not, these companies MAY be the best option for some people. Even if they are not the best option, they are an option, and by giving people the full facts you empower them to make their own decisions for their financial future. I really believe that you can educate people with all the facts to make their own decisions, but you really can't start making decisions for them.
    If saving money is wrong, I don't want to be right. William Shatner

    CC1 £9400 £9300
    CC2 £800 £750
    OD £1350 £1150
    • JimmyTheWig
    • By JimmyTheWig 25th Nov 11, 12:47 PM
    • 11,856 Posts
    • 11,395 Thanks
    JimmyTheWig
    • #7
    • 25th Nov 11, 12:47 PM
    • #7
    • 25th Nov 11, 12:47 PM
    Would it be possible to do it without having any sort of "League Table"?
    E.g. if it was an alphabetic list of the big players with the relevant info going across the page for each one. Not dissimmilar to what you've got here: http://www.moneysavingexpert.com/news/banking/2010/12/bank-charges-pricier-than-paydayloans.

    Then you don't get one company who is the "MSE Best Buy" for PayDay loans.
    Maybe you could include some of the alternatives in the table so people could see how using a credit card might be better, etc.
  • jamesd
    • #8
    • 25th Nov 11, 1:57 PM
    • #8
    • 25th Nov 11, 1:57 PM
    Yes, you should include the best or least bad, along with Lenders Compared, which typically offers better deals than even the best payday loans, if there's time to get a loan set up.

    The Lenders Compared lenders tend to be cheaper even for short duration loans, since the cost of interest for early loan settlement tends to be less than the fixed fee of a payday lender. And they have the substantial advantage that their interest rates are lower if it does turn into longer term borrowing.

    What I'd normally suggest for someone who needs this type of credit is getting a longer term deal via Lenders Compared, then making overpayments as they can afford them. That takes care of both the urgent need and keeping the interest cost to only very expensive rather than extortionate levels while someone recovers their financial situation with less time pressure.

    Saying how the payday lenders handle payment issues and detb management arrangements is a very good thing and could significantly help to improve the average experience of borrowers using this form of lending. Noting those which handle this badly would be of particular value, regardless of whether they are a good or bad deal otherwise.
  • tagq2
    • #9
    • 25th Nov 11, 2:07 PM
    • #9
    • 25th Nov 11, 2:07 PM
    How about a 'best-buy loan sharks'? I mean, like drugs, people are going to use them anyway, so it's best to keep potential customers informed... and to push for threats and beatings to be well-regulated.

    MSE already have a habit of ranking on figures rather than on facts: e.g. bank X may get ranked higher for some high-paying bond even though actually signing up might involve such hassle and delay that you've lost any bonus over the second best. This doesn't matter too much when you're dealing with saving or with large, long term loans for people who have demonstrated financial stability.

    But when you're talking about the kind of person a PDL is targeted at, any comparison is necessarily far more complex. 1000% vs 1200% APR won't matter as much as: what kind of fines if you're a day late? do they make a habit of trying to take payments multiple times, against OFT guidelines? do they ignore what is not in writing?

    Anyway, if you're going to go down the route of full, responsible advice, then you need to put PDL at the bottom of the list just before "loan shark". Ask: do you really need it? If it's for an emergency, have you tried a government crisis loan? Otherwise, if it's too small for a high street bank to help you, have you tried a credit union? A government budgeting loan? If it's because you haven't been able to make ends meet, why do you think the solution is short term credit - what are you going to do next month? Create a sufficiently complete "help making ends meet" tool which leads people through the options, not a single page which clueless people will find when they put "which best pay day loan company" in Google.
    • Discogod
    • By Discogod 25th Nov 11, 2:14 PM
    • 300 Posts
    • 119 Thanks
    Discogod
    without delving into the pros/cons of it - the only thing wizzing round my mushy head is: how is this different to recommending credit cards or your advice on getting the best mortgage for your situation?
  • PAYDAYLOAN
    I WAS OBTAINING PAYDAY LOANS AT 15! For me it really was like a drug! I am now in default with over 35+ different Payday Lenders and counting (As letters arrive!) and itís been like this since i was 15 I ran away from home, had no money and a GPRS enabled phone found quickquid entered every detail correct bar my dob entered as 30/11/1980 and was approved despite being 15 borrowed from some other company to pay them back could have been cash genie not sure and the rest is history!. By far the best if you fell in financial crisis for me I believe is Quickquid as they freeze charges as soon as you default meaning the debt stays a relatively low amount Mine went to £490 after a £400 loan. One off the worse I have encounted was 247 Moneybox I think I owe them over £1500 for £300 loan and then they took £20 off for a chaps transfer! Thereís a 0% interest offer for your first payday loan with instant loans direct for 8 days. The market is massive I am only 18 now and in over £35000 off debt thanks to payday loans, i know itís my fault but I had nothing in the first place I was kid still ffs! Every time I saw approved and the money got transferred i got excited! And now i canít get any more! cant keep to my arrangements! Have 3 CCJS in a 1980 DOB and I was born 1992! and the worst bit about it I cannot get any help because I committed fraud without even knowing it! Cant go bankrupt, cant enter a debt management plan.
  • tagq2
    how is this different to recommending credit cards or your advice on getting the best mortgage for your situation?
    Originally posted by Discogod
    (1) Typical circumstances of client;

    (2) Willingness of provider to offer loan;

    (3) Harshness of punishment for late payment.
    • worried jim
    • By worried jim 25th Nov 11, 6:44 PM
    • 10,256 Posts
    • 15,934 Thanks
    worried jim
    I WAS OBTAINING PAYDAY LOANS AT 15! For me it really was like a drug! I am now in default with over 35+ different Payday Lenders and counting (As letters arrive!) and itís been like this since i was 15 I ran away from home, had no money and a GPRS enabled phone found quickquid entered every detail correct bar my dob entered as 30/11/1980 and was approved despite being 15 borrowed from some other company to pay them back could have been cash genie not sure and the rest is history!. By far the best if you fell in financial crisis for me I believe is Quickquid as they freeze charges as soon as you default meaning the debt stays a relatively low amount Mine went to £490 after a £400 loan. One off the worse I have encounted was 247 Moneybox I think I owe them over £1500 for £300 loan and then they took £20 off for a chaps transfer! Thereís a 0% interest offer for your first payday loan with instant loans direct for 8 days. The market is massive I am only 18 now and in over £35000 off debt thanks to payday loans, i know itís my fault but I had nothing in the first place I was kid still ffs! Every time I saw approved and the money got transferred i got excited! And now i canít get any more! cant keep to my arrangements! Have 3 CCJS in a 1980 DOB and I was born 1992! and the worst bit about it I cannot get any help because I committed fraud without even knowing it! Cant go bankrupt, cant enter a debt management plan.
    Originally posted by PAYDAYLOAN
    Don't worry about the fraud- go bankrupt. Get free advice now www.payplan.co.uk
    "Only two things are infinite-the universe and human stupidity, and I'm not so sure about the universe"
    Albert Einstein
  • melancholly
    i think this actually is quite tricky...... the reality is that people will use them so some kind of guidance makes sense. however, there will be plenty of people who will see a guide as an endorsement of them, much like the guide to student finance is seen by some as being supportive of the new fees and loans. my personal take is that providing clear information on 'good' and bad points can only help - giving all the potential concerns and alternatives has to be important (as could a link to general moneysaving/budgeting). telling people what these loans involve is not the same as encouraging people to take them and may often do the exact opposite.

    this is one of those situations where you'll probably be damned either way. almost all moneysaving guides have moral questions attached - some argue that the cheap flightchecker encourages people to take extra holidays which is bad for the environment (clearly not its intention!). this might seem more difficult than other areas, but it's not as if all other guides from student finance to PPI reclaiming have been published without objections..... it's just a slightly darker shade of grey.
    • Eco Miser
    • By Eco Miser 25th Nov 11, 11:31 PM
    • 3,444 Posts
    • 3,239 Thanks
    Eco Miser
    If you mention any of them by name, they are going to treat that as an endorsement, "as seen on Money Saving Expert", whatever you actually say about them.
    However I think you should definitely say what interest rate, and other conditions, the best buy is, even if you don't state who the best buy is. Hopefully, that would help steer potential borrowers away from the worst buys.
    Eco Miser
    Saving money for well over half a century
  • Errata
    By all means develop a toolkit that people can easily understand and use wisely when considering taking a payday loan. Mentioning names is not sensible, your words will be chopped, cut and used out of context by payday loan companies - and others - in exactly the same way as critic's reviews of palys/films/theatre/books are.
    You use the word 'safe' a number of times. This indicates very strongly that payday loans are inheritantly unsafe and any guide should place great emphasis on that.
    .....................I'm smiling because I have no idea what's going on ...
  • Avocado
    Martin a person can not be everything to everyone all the time. To try to do so (as many MPs have found) weakens that persons position on anything he/she does really believe in and makes them appear implausible and shady. If you think about someone you hold up as a hero, lets use Nelson Mandela for an easy example, they are probably held as a hero because they did not try to be everything to everyone, they had a point and they stuck to it. In fact the more they stuck to the side of what they felt was right in the face of pressure the more likely they are to be thought heroic, like Mr Mandela in jail.

    Some things which people wish to avoid can be the right course of action (going to court about a debt for example). Other things people don't avoid can be more harm than good and payday loans are one of them. You wrote yourself that borrowing £100 at Wonga APR would result in more than the US national debt in 7 years! You also wrote the counter argument that Wonga isn't meant to be a 7 year long strategy, but I've got debts that old and I'm not going to be the only one on MSE who has. Thankfully none are over $14 trillion USD.

    Recommending payday loans is worse than recommending gambling. I'll use an example.
    John receives the advice "only gamble what you can afford to lose" and he places a £300 bet on a football match. He loses and is £300 poorer.
    Jane receives the advice "only borrow what you can pay back" and needing a car repair she borrows £200-and-something, meaning £300 to repay on payday. But before payday Jane is taken ill with an unpredictable flu bug and takes 2 days off work to recover. She is short the money to repay and so rolls it over. Next month she needs to find £300-and-something. Work have a bad month and cut her hours. Next month goes well but the debt is now out of her reach to repay and growing fast. Before long Jane owes a four figure sum and registers at MSE to post on the DFW board in despair.
    John has gambled a flat rate, a rate he already had, on one specific sporting outcome. In the second the final whistle is blown the fate of John's money is decided. Jane gambled on what she could not know, that she would definitely be able to pay that money back and Janes gamble is tested over several days until payday and even longer if that first payday doesn't clear the bill.

    This is why payday loans are exploitative and worse than gambling. The people who takes out payday loans do so honestly believing they will be able to repay the money and it will be fine. But they are also people with no savings, no other realistic sources of income, no cushion against the simplest of things (like flu or a garage bill). The evil of payday loans isn't when they work, it's when something else crops up. Something unpredictable. By the very definition of unpredictable it means taking a payday loan can never be actually safe.

    The only way you could take out a payday loan and be safe would be if you didn't need it. If you already had the repayment money. People do borrow from other sources in this way, but not from payday loans. One example is stoozing where people borrow money at 0% APR from credit cards, invest it in savings and make a profit, before repaying in full. No one is doing that with payday loans. They are borrowing money they need to pay for a shortfall in thier figures caused by income and essential outgoings not matching. Then next month trying to find an even higher figure from their income, and they still have essential outgoings. The whole set up is a recipe for disaster and the payday loan model of lending doesn't make much profit without a segment of it's clients failing to repay in full on the day.

    They are a bad, bad thing and the people they hit are the ones who can least weather it. I think you should focus on promoting the positive ways to live within ones means and the least negative ways to avoid and resolve debts. Not on how to take the biggest and most dangerous gamble of your financial life just in the name of getting by.
    Last edited by Avocado; 26-11-2011 at 11:40 AM.
    • MSE Martin
    • By MSE Martin 26th Nov 11, 2:55 PM
    • 8,115 Posts
    • 42,285 Thanks
    MSE Martin
    How about a 'best-buy loan sharks'? I mean, like drugs, people are going to use them anyway, so it's best to keep potential customers informed... and to push for threats and beatings to be well-regulated.

    MSE already have a habit of ranking on figures rather than on facts: e.g. bank X may get ranked higher for some high-paying bond even though actually signing up might involve such hassle and delay that you've lost any bonus over the second best. This doesn't matter too much when you're dealing with saving or with large, long term loans for people who have demonstrated financial stability.

    But when you're talking about the kind of person a PDL is targeted at, any comparison is necessarily far more complex. 1000% vs 1200% APR won't matter as much as: what kind of fines if you're a day late? do they make a habit of trying to take payments multiple times, against OFT guidelines? do they ignore what is not in writing?

    Anyway, if you're going to go down the route of full, responsible advice, then you need to put PDL at the bottom of the list just before "loan shark". Ask: do you really need it? If it's for an emergency, have you tried a government crisis loan? Otherwise, if it's too small for a high street bank to help you, have you tried a credit union? A government budgeting loan? If it's because you haven't been able to make ends meet, why do you think the solution is short term credit - what are you going to do next month? Create a sufficiently complete "help making ends meet" tool which leads people through the options, not a single page which clueless people will find when they put "which best pay day loan company" in Google.
    Originally posted by tagq2
    I'm not sure whether you meant to sound as rude as this does. Did you actually read the blog - you describe almost entirely what the plan is. 90% of the piece is about alternatives to payday loans another 5% is about 'if you do get a payday loan how to do it sadely' the question is whether we also include actual best buys as the other 5% (ok i know if we dont then i've only got 95% but you have my point) - and even we do the blog states it won't be purely on rate.

    Perhaps you should've actually read it before this relatively unhelpful rant.
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.

    Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.

    Debt-Free Wannabee Official Nerd Club: (Honorary) Members number 000
  • jamesd
    But they are also people with no savings, no other realistic sources of income, no cushion against the simplest of things (like flu or a garage bill). The evil of payday loans isn't when they work, it's when something else crops up. Something unpredictable.
    Originally posted by Avocado
    This is where payday loans are particularly useful. They can provide people with no other or no better resources a way to handle the unexpected events. Get rid of payday loans and they are left more vulnerable because a useful option that could have let them deal with a situation is gone.
    • BohemianCoast
    • By BohemianCoast 26th Nov 11, 6:50 PM
    • 262 Posts
    • 1,497 Thanks
    BohemianCoast
    Obviously I haven't seen the final article. But the problem with payday loans is that they're used by people who have absolutely no other borrowing cushion at all. So despite the fact that I can imagine circumstances when it would be sensible to use them, as you've outlined, I'd like to see a really strong emphasis on the 'how to make sure you only ever have to do this once, even if it means spending the next month as a vegan who doesn't go out at all and spends their evenings listing goods on eBay, so that your money will last the entire month next time'.
    2016 Money saving target: declutter my house *and* my folks' house! Sell £1000 in 2016, minimise food waste, buy nothing new...
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