[Closed] QuickQuid payday loans APR !

But you should never have to pay any interest as you pay back the loan before the interest kicks in. Clearly it's designed for the people who are going to fall over and not pay immediately.
If the interest is stated before you sign the contract, and at a point where you can still decide to not sign, I fail to see the extortion. 😉

Aaargh. Now all my google fed adverts are all for payday loans and companies offering to consolidate my PIG sized personal debt.

The APR may look extortionate, but remember that these are very short term, low value loans, with a high default rate.

For example 2278% APR could mean borrowing £200, and paying back £212.53 a week later - probably a typicalish scenario for a place like QuidQuick or Wonga which is designed to bail someone out until their next paycheck. Doesn't sound so bad when you look at it in context.

Given how often these loans must be defaulted on and the faff they must sometimes go through to get the money back, I don't think it is an unreasonable rate.

The whole concept of lending money to those who are just on the verge of balancing their books and standing up on their own two feet in the first place is questionable, but I don't think the APRs they charge are extortionate at all.

Poverty Tax comes to mind.

Agreed. It's a very short term micro loan that has a fee. That fee, when extrapolated would result in a crazy APR, but you're never meant to pay it. Only problem is, legally you have to state the APR when offering loans.

The whole concept of lending money to those who are just on the verge of balancing their books and standing up on their own two feet in the first place is questionable

It could be very useful if used responsibly. For example, if you are an itinerant worker, builder's mate say, and you have just started a job and need say boots or tools, but payday's not til next week.

Wouldnt be so bad if was really a tax that then went on to fund education or healthcare but it's not, it's legalized loan sharking that's paying for someones Caribbean mansion giving little back to the country.

epicyclo - Member

Poverty Tax comes to mind.

That's ridiculous - nobody is forced to take out these loans, and they are provided via a competitive free market.

Remember these are short term loans to help people spend too much money in the short term and screw themselves over for the next month - not the important types that allow the poor to get long term accommodation or something like that.

What do you suggest? That the government should subsidise the entire country in spending its next paycheck before it has earned it?

It could be very useful if used responsibly. For example, if you are an itinerant worker, builder's mate say, and you have just started a job and need say boots or tools, but payday's not til next week.

You're right - there are occasions where it is a very useful service and can do a lot of good. However (the downside of the free market distribution approach) is that companies try to sell these loans to people who would be much better off without them, and who should use some discipline instead.

a friend used them to buy christmas presents as her salary was 2 days late. she paid it back 2 days later. but to be honest, there is no way they should have given her the loan, given her credit history - including 2 CCJs!!!!!

My barclays acc now has a 'reserve' of £250 that you can use if you go over your OD limit
It costs £22 to borrow 1-250 quid for 5 days. Is that a worse APR?

It's sad to think that there must be thousands of folks out there who used this sort of loan to fund an excessive Christmas (or at least a Christmas outside of their means) that seems to have been so engrained in the nation's personality as a requirement that common sense and rationality have been lost. I just hope most find a way to pay it off before it becomes a problem.

Those of us (and I expect that is the vast vast majority on a place like this) from a socio economic background that can just expect to have access to free credit via a credit card of virtually endless limit that we can easily pay off within the interest free period can have little idea of what it must be like.

companies try to sell these loans to people who would be much better off without them, and who should use some discipline instead.

Don't you get in trouble with the FSA id you that?

The FSA insist that an APR rate is shown depsite the fact a short term loan company will not offer you a loan over such a period.

I read an interview with the CEO of Wonga I think it was and he was very defensive of the business model.

I'm not sure I agree with it, but banks are very rigid in their loans and overdraft facilities these days and I guess I'm lucky enough to be able to save money rather than live in debt so I'm not really in the best place to comment.

Still, if my boiler were to blow up tomorrow I'd be ****ed!