I always thought payday loans were loan sharks so I never went near them. Glad I didn't know any better or I'd probably still be trying to fix my debt problem by...err, taking out more debt. I wish I knew why I ever thought debt to pay debt was such a winning idea!!! Plonker!
so it's alright for a company to offer this scenerio is it ?????
Okay as Melanie says the vast majority pay back on time but that also means some don't a horrible situation for those few.
Borrow say £200 pay back £250 in a mths time (still 25% for a month)
Something goes wrong client cannot pay back maybe 3 in 100
So Customer owes £250 from month 2 at 1730% Apr these figures are approx bearing in mind something has gone wrong for the client to be
unable to pay back the loan in the first place i.e accident/sickness/job loss.
The Interest alone would be £4249 at 1700% after 1yr over a period of say 2 yrs the interest alone would be well over £10k all for a £200 loan over 1mth if unpaid, an absolutely horrific situation which we be out of control.
sorry these loan sharks have no place in society and I,m sad to think some people think it's okay, especially from some people who should know better.
Last edited by canaries on Fri Nov 12, 2010 9:50 am, edited 1 time in total.
If used properly these payday loan companies can actually save money. Take the above loan of £200 and interest of £50 payable at the end of the month. If you have urgent bills to pay and the bank refuses an overdraft you will find every direct debit bouncing. Not only will the bank charge for this but the companies whose DDs bounced will also charge. This puts you overdrawn and the bank then charges you for this. When your wages do eventually go in at the end of the month they are eaten up by charges and the situation is worse the following month.
A short term loan and £50 interest would have saved all this.
They are not loan sharks, all of the interest rates are upfront and they are licensed.
I wouldn't use them myself, but some people do find them useful, and as Mel says, the vast majority are paid back.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
So it's okay to charge 1737% as long as they quote this and are upfront about it ?????????
I,m sorry I don't agree, and if the regulator had some guts about them they would stop it, some people are desperate to get money and don't always look or even understand the interest rates or ignore because they are 100% certain they can pay back after 1 mth my concern is for the people who can't, or something goes horribly wrong in there lives i.e the sack or they trun up for work and the gates are closed and no-one can say that won't happen in this day and age.
Last edited by canaries on Fri Nov 12, 2010 10:11 am, edited 1 time in total.
I think we are going to have to agree to disagree on this one.
They are regulated, they are upfront with interest rates and nobody is forced to use them.
I think we have digressed somewhat from the original topic which was to ask people to discuss this with the BBC.
Perhaps we should lay the argument to rest now.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
The rate quoted is an APR or annual percentage rate. The reason it is so high is because the loans are for a short period of time and in the main it is illustrative. If you looked at the APR on a £200 unauthorized overdraft and took into account the fees and charges added, I am sure the APR would be even higher.
I am not backing these companies but only saying that used properly they do have a place in the market.
My concern is when it goes wrong because it does for some people.
Ps Michael People's
Work out the rate for an overdraft including fee's and charges over say 6mth and 12mth period you will find that your comment is factually incorrect.
canaries wrote:
so it's alright for a company to offer this scenerio is it ?????
Okay as Melanie says the vast majority pay back on time but that also means some don't a horrible situation for those few.
Borrow say £200 pay back £250 in a mths time (still 25% for a month)
Something goes wrong client cannot pay back maybe 3 in 100
So Customer owes £250 from month 2 at 1730% Apr these figures are approx bearing in mind something has gone wrong for the client to be
unable to pay back the loan in the first place i.e accident/sickness/job loss.
The Interest alone would be £4249 at 1700% after 1yr over a period of say 2 yrs the interest alone would be well over £10k all for a £200 loan over 1mth if unpaid, an absolutely horrific situation which we be out of control.
sorry these loan sharks have no place in society and I,m sad to think some people think it's okay, especially from some people who should know better.
I dont think you understand what they are for or dont want to know or know NOTHING about who they help ??
Fact they help out 10,000s of people who couldn’t get the money from anywhere else and many speak very highly of them
Fact they spell out their charges and their legal
Fact there not for people who want to borrow a set amount for 3 years
Fact they don’t break your legs
Fact the BBC programme will show some guy who drunk the loan away and now is moaning that he is been given a ‘hard time’
