Payday loans set for parliamentary vote

[BrilloPad]

Also, they do offer a genuine service in some cases. 2000% APR for 1 day is a reasonable fee.

But why can't people just wait for what they want or take some out of their savings?

I know that these days you whipper snappers are up to your necks in debt - but when I was a young lad credit was called the "never never".

[northernladuk]

Wonga charge an APR of around 4000%

It's tantamount to loan sharkery to be honest. I thought MBMA were taking the piss a little by putting my APR up 22% overnight, but that's got to be considered borderline illegal.

Only MF can make a gain like that

But you can't just bang on about the APR. They are not designed like that. They are designed to be taken for a very short period of time so APR is completely misleading. No one is going to lend you a tenner at 5% APR for a month. It is just isn't worth doing. It is the nature of the beast. I am not defending payday loans or anything but beating them over the head with the APR that will never be a factor isn't right.

For a £15 charge on a £100 2-week payday loan, the annual percentage rate is 26 × 15% = 390% which sounds horrendeous but the charge itself doesn't appear that bad.

As I say I aint condoning or defending them but if you are going to attack them at least have the right argument.

[BrilloPad]

But you can't just bang on about the APR. They are not designed like that. They are designed to be taken for a very short period of time so APR is completely misleading. No one is going to lend you a tenner at 5% APR for a month. It is just isn't worth doing. It is the nature of the beast. I am not defending payday loans or anything but beating them over the head with the APR that will never be a factor isn't right.

For a £15 charge on a £100 2-week payday loan, the annual percentage rate is 26 × 15% = 390% which sounds horrendeous but the charge itself doesn't appear that bad.

As I say I aint condoning or defending them but if you are going to attack them at least have the right argument.

Alot of truth in what you say - provided one pays back on time. If you cannot pay on time then things can very quickly escalate.

[Sands of Time]

Aren't we glad to have these companies?

The great unwashed are using this form of credit to keep up the flagging economy?

What happens when there's no consumer credit for this end of society?

Isn't the house of cards finally gonna fall?


Tone

[BrilloPad]

What happens when there's no consumer credit for this end of society?

Then the Chinese are all driving cars and we are all riding bikes.

HTH

[Zoiderman]

But you can't just bang on about the APR. They are not designed like that. They are designed to be taken for a very short period of time so APR is completely misleading. No one is going to lend you a tenner at 5% APR for a month. It is just isn't worth doing. It is the nature of the beast. I am not defending payday loans or anything but beating them over the head with the APR that will never be a factor isn't right.

For a £15 charge on a £100 2-week payday loan, the annual percentage rate is 26 × 15% = 390% which sounds horrendeous but the charge itself doesn't appear that bad.

As I say I aint condoning or defending them but if you are going to attack them at least have the right argument.

EH? If you are looking at it realistically, then the only way to compare them is by looking at the APR, not the EAR.

Regardless how you dress it up, it is 4197% APR, which is a lot.

Or do you work for one?

[BrilloPad]

EH? If you are looking at it realistically, then the only way to compare them is by looking at the APR, not the EAR.

Regardless how you dress it up, it is 4197% APR, which is a lot.

Or do you work for one?

I dont agree if you really borrow the money for 2 weeks. But if you can't pay back and borrow for a year then, of course, I agree with you totally.

[Sands of Time]

I'm just jealous - I'm lending at 7.4% on Zopa - I'd be happy with 70% let alone 4,000%



Tone

[Zoiderman]

I dont agree if you really borrow the money for 2 weeks. But if you can't pay back and borrow for a year then, of course, I agree with you totally.

For me its a clear indicator in how much this is costing you. Loaning £100 and paying back £15 a fortnight later, sounds fine, but it isn't. 390% may sound good, but it isn't. It is a tulip load of interest. I understand the business model, but it is a lot of money for a section of society who can't afford it. Seriously, if you are desperate enough to pay 4000% on a short term loan of £100, you are already up tulip creek, putting an extra 390% on that debt is taking away the paddle.

I still maintain it is good practise to look at the yearly costs of loaning the money, as otherwise, you can start defending it.

[d000hg]

Bridging loans are currently running at around 15%

Depends what you're bridging and for how long. Nobody is going to make money lending at 15% for a couple of days. Far too much work involved for the return.

But why can't people just wait for what they want or take some out of their savings?

I know that these days you whipper snappers are up to your necks in debt - but when I was a young lad credit was called the "never never".

I thought never-never was hire-purchase? Before my time though. there's a big difference between:

- Buying something expensive on HP
- A loan of a few days to cover a scheduling screwup or purchase you need to make
- Taking credit to buy things simply because it's offered, and not expecting to have the money to pay it back