MegaSack DRAW - This year's winner is user - rgwb
We will be in touch
Just got a chunk of (unwanted) junk mail through the door with the post. 'Buy as you view' - 49% typical APR, over three years...and they are not cheap in the first place.
Some people must get done over well and truly.
they're an even lower rent version of Brighthouse..
The thing is, though, that a lot of people budget to buy products with a weekly amount. They don't look at how much it's going to cost over the term of the agreement.
There's one born every minute as they say!
my initial reaction to that was ***k me!!! 🙄
Is that site real?
Its a 1 month loan (to see you alright until payday) so the actual percentage is 25% but the APR is massive
Its a 1 month loan
Or less 😯
Their quoted APR would seem to be based on a 28 day term.
You're better much off with a CC, you'd pay 0% for that sort of arrangement - assume this site is for people who have very poor credit ratings.
OK, realistically, if people are taking out loans to help them until payday, then it's a safe bet that they're not the most credit worthy folk
It's a fact of life that people with higher risk will pay more for their credit...
We had an acquaintance who worked for a company like that. Got quite shirty when people asked how he could balance his socialist views with his job. We don't see him any more.
I like the way that payday loan site explains how their 1737% loans are cheaper than regular 19.9% loans.
49% APR - if that sounds expensive have a look at the interest the nice man from the Provident charges 150% - 180% APR. APR isn't that useful a measure for a short term loan though. Those payday loans sound expensive - but in the sort of circumstances where someone might use one they are probably a lot cheaper than not using one - bounce a cheque or DD and it could work out much pricier.
Brighthouse and their ilk are a lot nastier than the cash loan people - they really are expensive, their goods are over valued in the first instance and Brighthouse are well known for chucking in lots of valueless insurances with things as well as craftily adding extras to the time of the sale that end up costing hundreds over the term of the deal. Someone I know bought a bog standard TV from there, something that would have cost £2-£300 in tesco, that was going to end up costing them way over a grand - £400 of that was the stand.
AS much as I despise Brighthouse, my really hatred is reserved for the rest of the retail industry who refuse to do business with the poorer quarter of the population. They create the void that villains like Brighthouse fill.
There was one on TV the other day advertising an APR of nearly 5000%. Then we wonder why the economy's ****ed.
As a bit of an aside- I well remember the attitude my parents had to debt, and my grandparents were ever more extreme. Debt was a thing to be avoided at pretty much all costs, and some shame was attached to being in it.
When did we stop talking about being in debt and start talking about credit? Seems to me that many are concerned with having a 'good' credit rating, for the obvious reasons- the modern world flows on credit.
But I still think it was a neat trick, swapping around our perception of what being in debt implied.
Borrowing and being 'in debt' aren't the same thing. Its often said that the average UK citizen is £14,000 in debt, but thats not true, they have average borrowings of £14,000, but an average personal wealth of over £100,000 (savings, property and other assets). Most people who are using credit do so because they can well afford it. .
Affordable credit isn't available though to people on low incomes - and thats where the vultures circle.
I take your point, Maccruisken, but would argue that if you lack the liquidity to pay off these "borrowings" instantly then you are, effectively, in debt.
Let's say I lend you a tenner on Monday and you give me it back on Saturday, and you buy me a pint to say thanks. What's the APR on that?
The wonga.com guy was interviewed in the Guardian recently: http://www.guardian.co.uk/business/2011/may/13/wonga-boss-errol-damelin-friday-interview - I think he makes his case pretty well.
I take your point, Maccruisken, but would argue that if you lack the liquidity to pay off these "borrowings" instantly then you are, effectively, in debt.
You're undoubtably "in debt", but credit cards and mortgages aren't subject to instant total payments - your liquidity only has to cover the monthly charge. For me, being "in debt", as my grandparents would think of it, is when that liquidity doesn't cover my immediate credit repayments.
Whilst I'm reading this thread I get an advert top right of the screen for Kwik Cash and another for KwikPayDay!
There's clearly a lot of money to be made.
Ripping off chavs is todays growth business.
I am wracking my brains to come up with a "Cletus farming" idea to make ££££££££s from the underclasses.
Not defending it, but APR is completely useless for short term loans.
Well it's a free market and if lenders aren't willing to lend to high risk people at seemingly acceptable rates then they're making a business decision that the risk isn't worth the return. As for short-term loans, well the costs of arranging distort the APR quite a bit. My brother's going to have to buy a car soon and I told him to borrow the money from me rather than a lender if he wants - even normal loans are quite expensive these days - esp compared to BoE rate and savings accounts.