I thought that short term loan companies couldn’t charge more than 0.8% per day with a cap of 100% of the original loan amount.

What is going on with the companies that advertise on TV with 1000%+ pa interest rates.

TBH i have more respect for a mugger stealing my wallet than these parasitic scum.

Is i that the daily rate has to be multiplied up and communicated as an equivalent APR? the fact that the ultimate value is capped doesn’t change that calculation?

(IANA Loan Shark, this is just a guess)

more respect for a mugger? at least you get choice with using (or not) these loan companies.

at least you get choice with using (or not) these loan companies.

Except that in a great many cases the people who actually need to use payday loan companies don’t really have a choice 🙁

Calculated to APR, the lower “daily” rates make you think you’re not being charged much 😜 and most companies who work in this market target short term loans of small value yet make big money out of them… to people who aren’t always the best at maths decision making process.

There are laws yes, fairly rigid and all must comply.

“Except that in a great many cases the people who actually need to use payday loan companies don’t really have a choice ”

I imagine it’s more a case of payday loan users being too feckless to look for (can’t obtain) a better loan rate or they just can’t say no to stuff they want but don’t NEED.

APR is kind of irrelevant for these kind of loads isn’t it, in theory at least. The rates were once described to me as lending my mate £30 for a week and him giving it me back a week later and buying me a pint as thanks.

Like most things, they’re useful if they are used properly but by very nature of the product, they’re easily abused.

I imagine it’s more a case of payday loan users being too feckless to look for (can’t obtain) a better loan rate or they just can’t say no to stuff they want but don’t NEED.

Are you a tory MP?

1325% pa equates to daily rate of 0.731% or weekly of 5.227%

So using Lunge’s example the mate buying you a pint for the loan of £30 for a week is ‘paying’ you more interest by quite a margin.

I imagine it’s more a case of payday loan users being too feckless to look for (can’t obtain) a better loan rate or they just can’t say no to stuff they want but don’t NEED.

Try and imagine another scenario then. Working zero hours contract on minimum wage, no hours for a couple weeks straight now and no other income. Rent is due, kids need fed, you have zero other credit as you are on zero hours contract and no steady income. You’ve went over your overdraft as your council tax direct debit came out, you have now been charged bank fees. As you have no money to pay this, a dailly fee is added. What started as being £10 short has now grown to £30. That’s £30 you will never have spare and will need to carry over to next month. Hopefully you get some hours soon, maybe a couple of shifts extra to make up the shortfall. What’s that? You’ve been let go, not enough work coming in? Shit. Better get onto social security. Wait how long do you need to wait before getting a paypment? Ok, go to the foodbank then, but foodbanks don’t pay bills.

Some people are so ignorant of how others need to live I’d advocate ridding them of all assets and belongings and seeing how long they survive.

Payday loans prey on the most vulnerable but then along with pawn stores where you “sell” you stuff until payday they always have done. The fact they are have such a high profile now and haven’t been driven out of existence is sad.

Credit card companies are no less scrupulous. I have a friend who sent them the paperwork to stop the cards / interest etc as they are about to enter bankruptcy and they responded within 24 hours with a letter saying that they understand that they (my friend) are having financial difficulties so have added an extra 5000 to the credit limit.

Are you a tory MP?

they aren’t that insightful.

I imagine it’s more a case of payday loan users being too feckless to look for (can’t obtain) a better loan rate or they just can’t say no to stuff they want but don’t NEED.

Are you a tory MP?

I’m going for a Daily Express editorial writer

Middleclastrackworld at its finest. Not even countenancing the idea that its not actually the entire countries population that have easy access to cheap available credit.

As with cheaper water/gas/electricity tariffs, new Audi’s on PCP, Santa Cruz Nomads on 0% finance etc – which also aren’t available to the poor/feckless/ruthlessly exploited* –  it costs a lot of ****ing money to be poor in this country.

They’re basically preyed on, while the government views them with at best contempt, and more usually; scapegoats

* delete as applicable to your political view

* delete as applicable to your political view

all of the above?

not really meant to be a long term loan  though is it, just that some people use it as

Try and imagine another scenario then. Working zero hours contract on minimum wage, no hours for a couple weeks straight now and no other income. Rent is due, kids need fed, you have zero other credit as you are on zero hours contract and no steady income. You’ve went over your overdraft as your council tax direct debit came out, you have now been charged bank fees. As you have no money to pay this, a dailly fee is added. What started as being £10 short has now grown to £30. That’s £30 you will never have spare and will need to carry over to next month. Hopefully you get some hours soon, maybe a couple of shifts extra to make up the shortfall. What’s that? You’ve been let go, not enough work coming in? Shit. Better get onto social security. Wait how long do you need to wait before getting a paypment? Ok, go to the foodbank then, but foodbanks don’t pay bills.

THIS^^^^^^^

Very much this.

Not a bad experience

I’ve had a few loans from Wonga over the last few years and have always found them pleasant to deal with. Some people may think it costs a fortune, but lets be honest – this is a payday loan, and isn’t designed for value for money, its designed for convenience. Like many people who use short-term lenders, I soon found myself in an unhealthy cycle and created a very stressful situation for myself where I was literally paying out my entire wage packet to Wonga and reborrowing that amount.This was my stupidity but I am surprised that as a responsible lender they allow you to take on so many loans within that space of time.Regardless of this, I called them to advise of my difficulties and they immediately offered me a helpful plan that meant I repaid my full debt without any further interest and split over a few months to make things more manageable. Even though I’m not sure I would use them again, the customer service experience I had was very good.

Dan

A “good” review from the Wonga website. From most of the reviews it seems even the people who got in trouble went in with their eyes open. Or at least knew it was a bad/last chance option

perhaps because they have a nice website sponsored a football team etc people think they are a regulated business?

So how many pints do i get after a week if i lent you £30?

I imagine it’s more a case of payday loan users being too feckless to look for (can’t obtain) a better loan rate or they just can’t say no to stuff they want but don’t NEED.

Well, what a piece of work you are. If I were you I’d be very ,<span style=”text-decoration: underline;”>VERY</span> grateful that you have never found yourself in the situation that some find themselves. Have you not noticed the proliferation of food banks etc.? Sure some are feckless in getting themselves into the shit but the vast majority are not.

1286% APR is 0.8% a day, you can’t just multiply it by 365. That is, believe it or not the new stricter cap, typically it was 4000% prior to 2015.

Is it ‘good value’? it’s really hard to say – you have to bare in mind there is a fixed cost to lending money to someone and it probably costs a Bank less in admin to lend a ‘nice middle class person’ £25k to “tidy up some credit cards” than it does for one of the payday Cos to lend someone £200 for 9 days as they, believe it or not, have more stringent checks.

So it might cost a Bank £14 in documentation, search fees, labour, bank costs etc to lend £25k which has to be covered within the profit of the lend, but makes a negligible difference to the total % cost to consumer.

It might cost PDL £16 to do the same, but if they’re only lending £100 they need to be paid £114 back before they make a profit, you lend £100 and ask for £124 back in 15 days, you’re APR is well into the thousands.

The APR isn’t the most evil thing about PDLs, it was the way they were sold and re-sold. Really the market should be tiny, they’re there for that day when the washing machine dies 2 weeks before payday in the same month Jnr needed braces, or whatever so you borrow £50 to get past this minor crisis and when you’re paid you repay £65 and adjust your budget accordingly – if that sounds stupid because you’re a responsible adult (who also earns £50k a year and has loads of spare each month to buy wood fired pizza ovens or whatever) then they’re not for you and you are lucky enough to not know how a lot of young people and families are living at the moment.

First they allowed people to roll over the debt, “hey, don’t worry about paying back the £124, just pay us £38 and do it next month” (£38 because now they’re paying for the full month) and people would, over and over and over again, until the next crisis, which they were starting to call “too much month in your pay” like it an unfortunate, but unavoidable thing and loads of people got trapped. I know of people paying £150 a month to them just in interest to roll over the debt every month.

In the end, the Government got pissed off and hit them like the fist of an angry god – if you think the PPI punishment was harsh on the banks, it was a relative walk in the park to how the Government went after Wonga, Cash Genie and a few others.

Seems they think the spotlight is off them now though and new ones are creeping back into the market. For every ‘good’ customer their will be 2 or 3 who get in over their head and they’ll make a fortune, and then the Government, via the regularity body will throw the book at them again.

I’m guess, but shirley would go something like this £1 at 1.08 daily

2 £1.08

3 £.1.16

4 £1.26

5 £1.36

6 £1.46

7 £1.58

8 £1.71

9 £1.85

10 £2

So takes you 10 days to get to 100% interest.

31 take ye to £10.06 and 1000% interest per month?

As I say dunno guessing. Do they charge interest on the interest?

https://www.bbc.co.uk/news/resources/idt-sh/How_debt_kills

An interesting read

That’s £30 you will never have spare and will need to carry over to next month.

Next month? It literally might never happen!

P-Jay has it dead right, it’s the first step on a spiral of debt that will just keep on getting worse.

Anyone who thinks it’s a good idea, however desparate their circumstances, should never have control of their own finances. It’s self descructive.

I’m guess, but shirley would go something like this £1 at 1.08 daily

2 £1.08

3 £.1.16

4 £1.26

5 £1.36

6 £1.46

7 £1.58

8 £1.71

9 £1.85

10 £2

So takes you 10 days to get to 100% interest.

31 take ye to £10.06 and 1000% interest per month?

As I say dunno guessing. Do they charge interest on the interest?

that’s 8% not 0.8%

I’m guess, but shirley would go something like this £1 at 1.08 daily

1.08 is 8%, not 0.8%.

The poorest people in society are often not those who are out of work, they are the minimum wage, zero hours worker. For these people, pay day loans may be seen as a lifeline, but if not used well they contribute to ever spiraling debt with no obvious way out.

This is compelling, sobering and powerful, a must read for anyone and everyone.

https://www.bbc.co.uk/news/resources/idt-sh/How_debt_kills

”

I’m going for a Daily Express editorial writer

Middleclastrackworld at its finest.”

Criticises summary comment by way of a summary comment.

The hypocrisy levels are high in you.

I imagine it’s more a case of payday loan users being too feckless to look for (can’t obtain) a better loan rate or they just can’t say no to stuff they want but don’t NEED.

You’re either trolling really badly (although folk have bitten 😀 ) or are genuinely unaware of the circumstances that their customers find themselves in that turn to these companies, instead (and understandably) relying on a poisonous media-fed opinion. I don’t know you, so I don’t know what drives what you think.

Describe the kind of person that you think uses a 1000% APR loan company? I’m not looking to scrap.

BTW, no snow in W.Yorks.

I’m going for a Daily Express editorial writer

Ouch, that’s a serious insult

Our local food banks run dry during the school holidays.

+ this https://www.theguardian.com/money/2018/may/26/debt-collecting-bailiffs-traffic-fine-suicide-jerome-rogers

Maybe don’t piss around at skool and end up in a shit job then breed kids you can’t afford to feed? Always some one else’s fault though isn’t it.

Rene59. Great post. Many on here don’t have a clue how fortunate they are, arguably myself included. I’ve been in plenty of dark days of debt, less now but would make some on here see me very different if wecthrew numbers around.

It’s easier than some think to find yourself in deep.

not really meant to be a long term loan  though is it, just that some people use it as

Because once in debt and subject to punitive levels of interest it can be very difficult to get out of debt. I despise these companies and the law that allows them to exist.

Those robbing ****ers shouldn’t be allowed to advertise on tv. Says a lot about the morals of ITV & Co.

Ah, daytime telly. Crap to fill the air waves, loan adverts for the desperate and charity give all your money away adverts for the nearly dead.

Toasty

I’m guess, but shirley would go something like this £1 at 1.08 daily

1.08 is 8%, not 0.8%.

D’oh!!

OK concept stands though, at 1.008

1 quid becomes 18 quid after a year!

You have just discovered the concept of compound interest. Were you not taught this at school?

On the surface pay day loans are a very useful service for some folk. Back to the £30 loan paid back with a pint a week later – That feels ok and is a much higher effective interest rate. Not something to be done every week but if it gets you out of the peril of even bigger fines etc it feels like a service that is good to have available. I guess the issue is when they are given to folk with only marginal chance of paying it back and how it’s allowed to snowball. I wonder what the percentage of bad transactions is to good.

Try and imagine another scenario then. Working zero hours contract on minimum wage, no hours for a couple weeks straight now and no other income. Rent is due, kids need fed, you have zero other credit as you are on zero hours contract and no steady income. You’ve went over your overdraft as your council tax direct debit came out, you have now been charged bank fees. As you have no money to pay this, a dailly fee is added. What started as being £10 short has now grown to £30. That’s £30 you will never have spare and will need to carry over to next month. Hopefully you get some hours soon, maybe a couple of shifts extra to make up the shortfall. What’s that? You’ve been let go, not enough work coming in? Shit. Better get onto social security. Wait how long do you need to wait before getting a paypment? Ok, go to the foodbank then, but foodbanks don’t pay bills.

Some people are so ignorant of how others need to live I’d advocate ridding them of all assets and belongings and seeing how long they survive

I didn’t have time to come back to this thread yesterday but this perfectly sums it up – how anyone can think *many* of the people caught up in such debt spirals have done so through choice I don’t know.

Maybe don’t piss around at skool and end up in a shit job then breed kids you can’t afford to feed? Always some one else’s fault though isn’t it.

I am glad no-one has risen to this, feeding the hate you hold inside.

Payday loans need to be forced to require a security, maybe against your actual pay. i.e. you don’t have enough right now to pay that emergency thing, but you will when you get paid at the end of the month. So the loan should be secured against the pay to ensure you can pay it back and will pay it back.

The problem is a lot don’t have the money to pay it back.

If it’s something costing more than the month’s salary is going to cover, then should be refused. Go speak to the bank to get a proper loan or credit card for a longer term loan.

No payday loan company wants that though. They make the money from the people who struggle to pay it off, and from debt collectors if they can’t.

Many people also use these loans for things because it’s there. If it wasn’t there they might think twice. e.g. little brat’s birthday coming up and they want to buy it an expensive present, don’t have the money so get a payday loan. Instead, just get a cheap present.

Go speak to the bank to get a proper loan or credit card for a longer term loan.

But the people that use Payday loans generally can’t get ‘proper’ loans or credit cards – that’s the problem and that’s what these parasitic companies feed on.