Reply to: Payday lenders - any sympathy?

[TykeMerc]

Agreed, but forcing them to show a rate that is 2000% higher when they could simply use the flat rates of each (10% & 30%) is nonsensical.

If you have ever worked on a system that calculates APR then you'll know just how utterly moronic it is.

Not worked for a financial in over a decade so I can't comment on how moronic the rules on APR are , moronic or not so long as they're applied consistently (if moronically) then at least it's possible to compare.

[blacjac]

Agreed, but forcing them to show a rate that is 2000% higher when they could simply use the flat rates of each (10% & 30%) is nonsensical.

If you have ever worked on a system that calculates APR then you'll know just how utterly moronic it is.

[TykeMerc]

Source: Loan APR Calculator. Calculate APR from loan amount, repayments and term
zero fees, loan amount £100, 1 monthly payment of £110 or £130

A. 213.9%
B. 2229.8%
As others have said, forcing them to advertise an annual percentage rate for a 1 month loan is pointless

True, but it does allow direct comparisons of interest rates on credit products, it could be argued that's quite useful to have for consumers.
Let's face it a £30 fee on a £100 loan for 30 days isn't exactly chicken feed. Yes the loan company has admin costs to deal with, but their profitability is a matter of record and the social cost isn't exactly trivial to certain parts of society.

[blacjac]

I noticed that credit unions charge £10 to borrow £100 for a month - payday lenders charge £30.

What is the difference in APR?

Any mafematicians around?

Source: Loan APR Calculator. Calculate APR from loan amount, repayments and term
zero fees, loan amount £100, 1 monthly payment of £110 or £130

A. 213.9%
B. 2229.8%
As others have said, forcing them to advertise an annual percentage rate for a 1 month loan is pointless

[vetran]

How do you feel about the old folk who get ripped off when some pikey cons them out of their life savings? Presumably they should have known better also.

SAS try this

he quality of mercy is not strain'd,
It droppeth as the gentle rain from heaven
Upon the place beneath: it is twice blest;
It blesseth him that gives and him that takes:

[BoredBloke]

FFS let adults make decisions as they think fit. Fooking nanny state.

And what if that adult hasn't got the ability to make this decision. There are plenty of special needs people out there (and on here) Some people have special needs that make them incapable of seeing the other side of an argument. Not everything is black and white in your Aspergers world!

How do you feel about the old folk who get ripped off when some pikey cons them out of their life savings? Presumably they should have known better also.

[vetran]

FFS let adults make decisions as they think fit. Fooking nanny state.

yeah just look what happened when your parents made decisions, if only it had been to use a rubber!

I believe the following are required:

[sasguru]

FFS let adults make decisions as they think fit. Fooking nanny state.

[BoredBloke]

True, but most people will only see the monthly payment and as that looks affordable won't question the longterm cost of the product

They're not exactly marketing to the more intelligent members of society after all

I appreciate that...I just think its taking the piss a lot!! I mean Baird are hardly up there with the best TV's yet this is over £500 for cash. My @rse. I spent £350 and got a 42 inch 1080p LCD tv from Richer Sounds. So they massivley markup the cash price and then add a huge apr to the finance.

[Old Greg]

Because they need fags and alcohol now!!!

Preying on financial unstable people isn't a new phenomenon though. There used to be a shop in Birmingham that allowed low income or credit unworthy people buy electrical appliances many years ago. Small shop front with a load of items in an a huge back office of lawyers/financial bods chasing the debts that were inevitable racked up. Was just a front to get people in to debt and then hammer them with interest and penalties.

Mind you, anyone buying from a shop above a kebab joint should take a little more care.

[amcdonald]

I walked past one of these plases on Sunday. They had a 42inch LCD tv by Baird on sale for over £500 - already over the odds and way more expensive than the likes of Richer Sounds etc. To do it on their finance was over £1400 in total. That is a shocking credit charge.

True, but most people will only see the monthly payment and as that looks affordable won't question the longterm cost of the product

They're not exactly marketing to the more intelligent members of society after all

[BoredBloke]

Bright House?

I walked past one of these plases on Sunday. They had a 42inch LCD tv by Baird on sale for over £500 - already over the odds and way more expensive than the likes of Richer Sounds etc. To do it on their finance was over £1400 in total. That is a shocking credit charge.

[TheFaQQer]

I don't think they are after sympathy, are they?

[BrilloPad]

credit unions are capped, they seem to be doing ok.

it needs some restraint, they are advertising constantly on prime time tv which suggests they are making massive profits.

I noticed that credit unions charge £10 to borrow £100 for a month - payday lenders charge £30.

What is the difference in APR?

Any mafematicians around?

[vetran]

Because to some people £100 is a meal out, to others it is the choice between heating and eating, and a logal cap at 30% will move more people to illegal sources of funds

credit unions are capped, they seem to be doing ok.

it needs some restraint, they are advertising constantly on prime time tv which suggests they are making massive profits.