2247% payday loans!!!!!!

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This topic has 14 replies, 13 voices, and was last updated 14 years ago by DavidB.

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2247% payday loans!!!!!!
stonemonkey
Free Member

working from home today and just seen an advert offering short term loans , APR 2247%. Im shocked!

Posted 14 years ago

brant
Free Member

It's not far off that if you borrow a tenner off your mate and you buy him a pint as a favour…

Posted 14 years ago

jon1973
Free Member

Very short term loans always have high interest rates, otherwise it wouldn't be worth them lending you the money.

Posted 14 years ago

Rich
Free Member

It does sound ridiculous, but I noticed on an advert that if you lend £70 for 5 days, you then pay back £79, that was about 2700% APR, which isn't that bad if you are desperate.

Posted 14 years ago

paulrockliffe
Free Member

I love that they have to put the APR figure on the screen, they must hate having to do that!

But overall I think it's a useful service, so long as you're not stupid enough not to pay it all back as soon as you get paid.

Posted 14 years ago

clubber
Free Member

if you lend £70 for 5 days, you then pay back £79

Why would you lend some some money and then pay them back too? Doesn't sound like a very sustainable business model 😉

Posted 14 years ago

mk1fan
Free Member

APR figures are totally irrelevant and confusing for these types of loans. To put it another way a mortgage may have an APR of 7% but you end up paying back about twice what you originally borrowed – if you don't clear it early.

Posted 14 years ago

Stoner
Free Member

Although in either case (mortages or short term credit loans like cards) most people seem to get extraordinarily and ignorantly hung up on their interest rate quite rightly bearing little resemblance to the base rate.

Probably just simpletons who are getting confused because they are both referred to as "interest rates" by the meeja.

The cost of money (base rate) has almost naff all to do with the cost of credit (the margin). Two very different things.

Posted 14 years ago

squin
Free Member

There is a place for these type of loans, but can't help but think……ROBBING B@ST@RDS!!!!

Currently the banks aren't helping the situation with their lending policies (or non-lending as is probably closer to the truth).

Someone will be along in a minute to say that if you can't afford it…blah,blah,blah. Life's not perfect though and I'm sure most of us feel the pinch once in a while.

Posted 14 years ago

mrmichaelwright
Free Member

I love that they have to put the APR figure on the screen, they must hate having to do that!

the target market for such loans are not put off by high interest rates

that's how the likes of crazy georges and various catalogue companies get away with rent to buy and buy in instalment packages

Posted 14 years ago

naokfreek
Free Member

Lots of people use these loans….it's good business, spose such a thing could come in handy but, i for one, try not to get into a situation where i would need it…but you never know really.

Posted 14 years ago

stonemonkey
Free Member

yes in pure monetary terms its not that bad i suppose , but I still cant help but think that these loans prey on those in the weakest position. thing was it was followed by an advert saying how you can right off tons of "unpayable" debt

Posted 14 years ago

Northwind
Full Member

APR is meaningless for such short periods, which isn't to say it's not a ripoff but it's not worth paying the slightest bit of attention to the APR.

Posted 14 years ago

Rich
Free Member

clubber – Member

if you lend £70 for 5 days, you then pay back £79

Why would you lend some some money and then pay them back too? Doesn't sound like a very sustainable business model

Tsk, school boy error! 😆

But then you did write some some so you fail too. 😉

Posted 14 years ago

DavidB
Free Member

The original model was, you borrow £200 then pay £220 back next week..or defer payment for a fee of £10. Guess what happens every week, you pay the £10, this goes on for months making the lender an absolute mint.

Not sure if that model is legal in the UK

Posted 14 years ago