Pay Day Loans = Legallised Loan Sharks...?
Discussion
http://www.bbc.co.uk/news/business-16905144
Is not this trend of desperate people turning to Pay Day loan companies just legalised Loan Sharking, which will inevitably lead to greater hardship?
The government needs to keep a tight rein on this sector I think...
Is not this trend of desperate people turning to Pay Day loan companies just legalised Loan Sharking, which will inevitably lead to greater hardship?
The government needs to keep a tight rein on this sector I think...
I've got mixed feelings about these companies. They clearly provide a service for a certain sector of society. The 3000% APR is clearly annual when the loans are supposed to be monthly (or shorter), and without credit checks is probably lower than the rate I'd want to lend to people. Unlike loan sharks I would imagine these companies don't come bangingn on your door and breaking legs if you default.
However, I would imagine that people take out another payday loan to pay the last one off - which ends up in a snowballed disaster. Whether that requires legislation, or just much, much better financial education I don't know.
However, I would imagine that people take out another payday loan to pay the last one off - which ends up in a snowballed disaster. Whether that requires legislation, or just much, much better financial education I don't know.
I find it very bizarre, reading the article, that people are turning from credit cards to pay day loans? Surely, i'd have thought it would be easier to get a credit card that's 0% for 12 months on purchases and pay off a bit each month than taking out a payday loan that'll entail more interest and run you into more problems if you can't pay it back?
Are these people mad?
Are these people mad?
Maxf said:
I've got mixed feelings about these companies. They clearly provide a service for a certain sector of society. The 3000% APR is clearly annual when the loans are supposed to be monthly (or shorter), and without credit checks is probably lower than the rate I'd want to lend to people. Unlike loan sharks I would imagine these companies don't come bangingn on your door and breaking legs if you default.
However, I would imagine that people take out another payday loan to pay the last one off - which ends up in a snowballed disaster. Whether that requires legislation, or just much, much better financial education I don't know.
i bet they are pretty sharp at passing bad debt on to more aggresive collection tyoes though.... However, I would imagine that people take out another payday loan to pay the last one off - which ends up in a snowballed disaster. Whether that requires legislation, or just much, much better financial education I don't know.
bloke in pub comes up to you and asked if he can borrow £100 until payday. you don't reallyu know him, and ask aroudn- people say he's alright but always a bit skint. So you say you'll lend hi the £100, but you want £120 back (not unreasonable).
3 Weeks later he pays you back the £120.
go work out the APR....
3 Weeks later he pays you back the £120.
go work out the APR....
I was an advisor at the CAB for a while and met the probable recipients of these loans. They have absolutely no where else to go. Often they have used and abused Govt hardship loans and their friend's and family's have been borrowed from and not been repaid at previous crisis points. Where else can these people go?
ianash said:
I was an advisor at the CAB for a while and met the probable recipients of these loans. They have absolutely no where else to go. Often they have used and abused Govt hardship loans and their friend's and family's have been borrowed from and not been repaid at previous crisis points. Where else can these people go?
Don't know where they could go but actually learning how to live within your means would be a start.I grew up in a single parent family on a council estate and were skint as hell. We endured times of serious hardship where we didn't have enough food on the table. It wasn't unusual to have a single ham sandwich for dinner and I genuinely appreciated having a hot meal at school. It was bloody miserable but my mum never borrowed a bean and had no family to help us out or any government hardship loans.
Borrowing money is a sad excuse and ultimately leads us nowhere. It's like being in constant overdraft as you still need the same money to live, you're just £250 down, constantly.
ianash said:
I was an advisor at the CAB for a while and met the probable recipients of these loans. They have absolutely no where else to go. Often they have used and abused Govt hardship loans and their friend's and family's have been borrowed from and not been repaid at previous crisis points. Where else can these people go?
They can stay out of the pub and the bookies for a start. There is nothing wrong with these loans. It's very clear how much they cost at the outset. And given a choice between having your keens broken or paying a chunk of interest I know where I'd go.
They're providing a service. If you don't want it, don't use it.
k off.anonymous said:
[redacted]
Where in my original post did I question the Apr rate? Or the clientel being used and their trustworthyness? My point is the government is letting companies become nothing more than loan sharks in allowing this kind of business model to so easily be set up and little regulated. I wouldnt be half surprised to see the same names associated with this business model as those currently being associated with clamping/parking enforcement companies and the like. Run by sharks/excons and thugs.I bet you even the more 'legit' loan companies quickly sell on the debt to the heavies.
I'd be curious to find out who the people are who are behind these firms, as they seem to enjoy a level of liquidity that the banks can't boast 'at these difficult times'.
In general, I'm in agreement with those who point out that the APR isn't really that bad, and that it's a better option than a loan shark.
I am interested in the sudden need for these companies however, and I think it's a bit more complex than the PH view of 'those feckless gits pissing their doley money up the wall'. There must be a lot of workers, on low to mid-level wages who are strugging to make ends meet against the rising cost of living - travel/fuel prices spring to mind.
In general, I'm in agreement with those who point out that the APR isn't really that bad, and that it's a better option than a loan shark.
I am interested in the sudden need for these companies however, and I think it's a bit more complex than the PH view of 'those feckless gits pissing their doley money up the wall'. There must be a lot of workers, on low to mid-level wages who are strugging to make ends meet against the rising cost of living - travel/fuel prices spring to mind.
The Guardian has decided having the option of credit from these companies is bad in itself, so they should be banned. Like Top Totty beer (well all alcohol), fags, bookies, fast food, the Daily Mail etc etc they should all be banned so the poor can't hurt themselves.
Nobody forces people to borrow from these companies.
Nobody forces people to borrow from these companies.
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