Bargain of the week......

Lynton

Lynton

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Lynton (yes really!)
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Representative 278% APR. Representative example: Borrow £500 and pay £79.09 per month for 12 months at a fixed interest rate of 140% per year. The total charge for credit is £449.01 (all interest). The Total Repayable is £949.01.


Now I know they are loaning to people with the bad credit records though it seems that the short term payday loan bods .. eg wonga.com are branching out into 12 month loans (or 364 days to be exact.....)

Why does that make me thing there is somekind of legislation for all loans of a year or more? :shrug:
 
in my eyes i dont mind the companies charging the huge interest rates because in the short space of time they are not going to earn much from an interest rate you would charge for a 4 year loan.

If you need a pay day loan then ok but then after that if you cant pay it then tough or if you take it out in the first place knowing you cant pay back when agreed then tough... own stupid fault IMO. Learn to budget and if you cant afford it then save up, if you cant save up then you cant have it
 
It's totally clear from the description exactly how much it is going to cost you.

I do think a representative example of how many months it would take to save up the same amount instead of paying it out in a loan might help those that need things now to put it off a bit longer.

Borrow £500 now and lose £449 in interest charges or save up £500 in 6 months and lose nothing. Do you want an extra £449 in 12 months? Then save don't borrow!
 
mark4183 said:
in my eyes i dont mind the companies charging the huge interest rates because in the short space of time they are not going to earn much from an interest rate you would charge for a 4 year loan.
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Lets compare 2 shall we. Sainsburys £10,000 over 5 yrs at 6.1% Rep APR. Total repaid £11,646.10 or 16.46% extra paid back.

The example above. £500 over 4 yrs at a rep APR of 278% Total repaid is £949.08 or 89.81% extra paid back.

So yes £441 is less than £1646 but 20 x the capital outlaid by the lender, lent out for a lot longer...

Surely those numbers do make you sit up and think a bit?




mark4183 said:
If you need a pay day loan then ok but then after that if you cant pay it then tough or if you take it out in the first place knowing you cant pay back when agreed then tough... own stupid fault IMO. Learn to budget and if you cant afford it then save up, if you cant save up then you cant have it
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Everyone's entitled to their opinion.

My original one was that these payday loans seem to be expanding into the slightly longer term options at just as silly R APR%'s.
 
Lynton said:
Representative 278% APR. Representative example: Borrow £500 and pay £79.09 per month for 12 months at a fixed interest rate of 140% per year. The total charge for credit is £449.01 (all interest). The Total Repayable is £949.01.


Now I know they are loaning to people with the bad credit records though it seems that the short term payday loan bods .. eg wonga.com are branching out into 12 month loans (or 364 days to be exact.....)
Click to expand...

If you were lending unsecured to someone with bad credit history and no assests, what interest rate would you charge?
 
srichards said:
It's totally clear from the description exactly how much it is going to cost you.

I do think a representative example of how many months it would take to save up the same amount instead of paying it out in a loan might help those that need things now to put it off a bit longer.

Borrow £500 now and lose £449 in interest charges or save up £500 in 6 months and lose nothing. Do you want an extra £449 in 12 months? Then save don't borrow!
Click to expand...

Oh I quite agree that following on from the changes in regulations it needs to be spelt out crystal clear..... and indeed it is..... just shocked at the amounts.

onomatopoeia said:
If you were lending unsecured to someone with bad credit history and no assests, what interest rate would you charge?
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Indeed and a fair point as well. Please note I am not condoning or criticising them as such per se.. they are in it for a business and I am sure those who default will soon have visits from the bailiffs..

Martyn... said:
I don't know, how much is the EU charging Greece :naughty:
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:lol::lol::lol: Excellent.
 
Some of these companies do take advantage of some of their customers though:

http://www.bbc.co.uk/news/business-17298515

edited to add: 50,000 loan applications per month! And charging a £70 admin fee whether the application was successful or not.
 
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onomatopoeia said:
If you were lending unsecured to someone with bad credit history and no assests, what interest rate would you charge?
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I wouldn't. I'd have them face up to the their financial shortcomings now rather than defer them for a period that only exacerbates the debt. It's just illogical. I'd love to see statistics on the typical repayment periods and amounts for these loans. I suspect a lot of people end up worse off for them.
 
The fact that these companies are thriving is, perhaps, a sad indictment of the society we live in.

We are all encouraged to live beyond our means and to have the latest gizmo/ car/ tv etc.

Those of us who are more fortunate, sensible, or maybe just lucky enough not to fall into the consumerism trap can sit and gloat - the unfortunate, or plain stupid may not.

IMO it is legalised 'loan sharking':shake:
 
The only reason these loan companies still exist is because Boris Johnson was sponsored by Wonga for his Mayoral campaign.
 
notaclue said:
The only reason these loan companies still exist is because Boris Johnson was sponsored by Wonga for his Mayoral campaign.
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Well one of the worst culprits, Yes Loans, who have now had their credit licence withdrawn are based in South Wales. Should we also blame the (presumably local) employees for ripping off hundreds of innocent loan or credit applicants?
 
Its not the employees fault what Yes loans business practices are/were.

When the coalition tried to ban these "loan sharks" they realised who had been sponsored so didnt/couldnt do anything about it.
 
A friend of mine went bankrupt 18 months ago and was recently given a new credit card with an interest ratw of 543.5% and he was chuffed
 
notaclue said:
Its not the employees fault what Yes loans business practices are/were.
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They may not have initiated the practices but they certainly carried them out. This goes beyond bad business practice, it's fraud and "following orders" isn't really an acceptable defence.

notaclue said:
When the coalition tried to ban these "loan sharks" they realised who had been sponsored so didnt/couldnt do anything about it.
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But they have done something about it. They've revoked their licence. If Wonga, specifically, have been breaking the law they will be investigated and dealt with accordingly. I can assure you that Boris's influence, despite what the opposition and conspiracy theorists might have you believe, wouldn't stretch as far as to silence all the various bodies that have a statutory duty to investigate these matters.
 
I'm not saying that I agree with what they are doing and if we are employed then as employees we either do what the company wants or find another job.
 
Spuff said:
They may not have initiated the practices but they certainly carried them out. This goes beyond bad business practice, it's fraud and "following orders" isn't really an acceptable defence.
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In what way is it fraud?
 
One of the main sticking points for these types of financial services is the advertising. Heavy focus on TV advertising during the day, obvoiusly when there are more of the potentially vunerable target market watching.

It would be good if the ASA were to introduce a rule that a debt management or financial advisory service were advertised in the same time period. That way the viewer could see more available options instead of having loans embedded in their brains.
 
So much for encouraging folk to stay away from loan sharks on street corners, Open a shop display the interest and it becomes legal.

Something wrong with this country, they banned advertising on some alcohol and ciggys on tv, encouraged gambling, bookies and bingo advertising, allowing loan sharks on tv. Jeez! it's went from bad to worse.
 
Flash In The Pan said:
In what way is it fraud?
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I was referring specifically to Yes Loans. The OFT has withdrawn its credit licences after it found it had conducted "deceitful and oppressive" practices.

Customers were charged fees after handing over debit or credit card details for "identity checks" amongst other things.

On the subject of other companies providing loans at very high interest rates, then whilst it might be morally questionable, it's not illegal and obviously fulfils a demand for these type of products.
 
Personally I would never even touch a company that has the word "Wonga" in it's title.
it's amazing how it never occurs to the people who get these loans, how much more they are spending for a short term fix. I can understand the need if bills have to be paid etc but does it never dawn on them "hey, if I get it next month or if I put aside what I would be repaying in loan payments, I could have the money in x months and not have £xxx still to pay.

It's ironic that the people with the least money have to pay the most punitive rates.
 
gogless said:
A friend of mine went bankrupt 18 months ago and was recently given a new credit card with an interest ratw of 543.5% and he was chuffed
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Pay it back in full every month and it won't cost a penny extra :lol:
 
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