I have wondered for years why no Government ever legislates against these companies that advertise loans with extortionate rates of interest in all the mainstream media,some poor people who do not know any better have the shackles of debt until they die and I always have maintained that the weak need protection from these sort of dressed up respectable sharks that prey on the weak.
Anonymous has left a new comment on your post "Where has it gone so wrong?":
"North wales credit union charges 14% a.p.r for loans 2/3rds the average rate of the high street lenders.
If government gave higher tax relief for credit union savers then there maybe sufficient funds to lend to more borrowers at rates that are affordable.
The other alternative is to put a cap on interest rates but as the politicians are so far up the bankers behinds there's little chance of that happening. "
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9 comments:
Nothing compared to the waste overseen by Councellor Priestley in environment
Keep an eye on the efforts of Stella Creasy, MP for Walthamstow, who is campaigning against the loan sharks and winning plaudits across the political divide.
One of the tv adverts shows an APR of 478%.
Typically borrow a £1000 over a year and pay back £4780 interest plus the original £1000 = £5780.
I think you've left a digit off it's 1478% which is way off the scale, but of course you dont have to borrow the money!!
Borrow £1000 for one year.
Plus £4780 interest equals a payback of £5780.
No PPI though.
Mervyn King
Did you hear about the HSBC customer who successfully campaigned to have his PPI refunded, about £1500 and the bank used it to wipe off his overdraft.
I laughed my socks off and that's putting it politely.
I have just seen a really cheap one on the telly, it is only 278%, go for it it's a bargain, NOT.
just to clarify this APR debate.
Firstly, i do not work for any loan companies, I merely know how it works.
APR is the combination of interest and any fees ie admin fees.
The companies you speak of largely only offer short term loans, many until next payday, however they are forced by law to show the cost as an annual charge as above.
they never charge that if it is paid in time as agreed.
so an example would be a loan of £500 over 1 month with an admin fee of £75, and an interest charge of £124.16 would give the APR of 478% apr, but the interest is actually £124.16, which I know is ridiculous, I wouldn't dream of it etc etc, but it is highly misunderstood by most people. This example is based on repayment at the agreed period of 1 month, but failing that, then i am sure there are fees added and compounded interest upon interest etc.
I dont condone these loan companies, but on the other hand, everything they do is clearly advertised, unless you cant read, (so someone else should read it for you before taking out a loan) and it aint rocket science to know what you are signing up for.
The whole PPI misselling is another example, along with where theres pain theres a claim etc etc
GENERALLY A CULTURE OF PEOPLE OUT TO GET SOMETHING FOR NOTHING WHO DIDNT READ AND UNDERSTAND WHAT THEY WERE SIGNING FOR AND BLAME EVERYONE AND ANYONE FOR THEIR OWN INCOMPETENCE!
Has it occurred to you that some of these people may be in genuine need of a financial boost by taking out a payday loan?
I am not condoning this way of either borrowing or lending but as we have proved here it's not rocket science but it isn't absolutely straightforward either.
When I worked in insurance, 10 years, I was expected to explain every little detail of the policy etc and I did, that is because I was and still am, honest and reputable.
I was told in 2004 by a young lady who worked the phones for a local loans firm that she should keep the clients talking for at least 10minutes at a £1 a minute before passing them onto the regular line.
Is this honest and reputable?
Tosh
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