Payday and doorstep lenders

[applelover]

Just seen Jo Swinson MP act as the coalition apologist for payday lenders. A truly sorry episode.

Anyone considering taking a payday loan (eg wonga, quickquid etc) or doorstop loan (eg provident, pinewood, greenwood etc) should think extremely carefully before doing so.

If you are in the sort of emergency that means that you're considering using such lenders get yourself down to your local citizens advice bureau instead. You'd be amazed how many schemes and grants are available and at the level of help you can get negotiating with creditors.

Whatever you do never ever borrow off of a loan shark. Do this and you will be left with very few options if you can't meet your payments.

Sorry for the rant. It's just a topic that I feel strongly about.

 

[SupaBlues]

I tend to disagree. I use these from time to time and never had any problems as I am able to keep on top of the repayments. I would have zero chance of getting a loan from a bank so there are very limited options available. From what I can gather I am not the only person in this boat as this is reflected in how popular they are. If wages were paid at a level where people could afford to live then these payday loans would not be so popular. So where does the blame lie? Certainly not with companies that are providing a service that the banks wont.

 

[Massimo Giovanni]

Too many social issues are going uncared for today; the plight of homeless and mental health problems etc. I know there are emergency loans from DSS BUT; and its a big BUT too many don't get paid back and so the huge interest loans business thrives and the weak of mind and soul are unintentional (by them) the victims...again....and again.

 

[McNasty]

For the vast majority who cannot afford to live with their existing income taking on debt will be a disaster.

 

[South Bank Hank]

So where does the blame lie? Certainly not with companies that are providing a service that the banks wont.

It's not the service they provide, it's the ridiculous fees they're applying against vulnerable members of society. As Applelover says, it's legalised loan sharking. I'm a Conservative at heart and happy for businesses to make money, but these guys are just immoral and they need reigning in.

 

[Kent Shrimper]

I don't have a problem with them as they provide a service. Like most things in life someone will get caught up in the spiral. Yes there rates are steep but clearly people are willing to pay and in a lot of cases the money is paid back no problem.

If these people didn't exist surly there would be a whole raft of people maybe short at the end of the month who can't eat or putting the hearing on etc. these people need a little to tied them over for a few days until there paid?

 

[Ulysses]

http://blog.moneysavingexpert.com/2...national-debt-over-14-trillion-after-7-years/

 

[bucket&spade.f.c]

It's not the service they provide, it's the ridiculous fees they're applying against vulnerable members of society. As Applelover says, it's legalised loan sharking. I'm a Conservative at heart and happy for businesses to make money, but these guys are just immoral and they need reigning in.

I work for a "adverse lender" loan company in the collections department.

The reason for the high interest and fees etc are due to the following (in my eyes)

1.Use of brokers
2.The fact its individual investers money from out side the company.
3.The fact the people that use these types of companies are those that have either had financial difficulties in the pass,those with zero understanding of how to manage money or just those who dont pay so they are classes as a high risk.
4.becuase they can.

 

[Tangled up in Blue]

Good piece on this on Newsnight last night.Apparently,some 30% of 18-24 year olds have taken out one(or more)of these loans.Of those who do so, only 2/3 pay back the loan at the end of the month.Sounds like a recipe for long term debt for many, to me.Also, these sort of companies are banned in most of the rest of Europe and in the US.

 

[South Bank Hank]

I work for a "adverse lender" loan company in the collections department.

The reason for the high interest and fees etc are due to the following (in my eyes)

1.Use of brokers
2.The fact its individual investers money from out side the company.
3.The fact the people that use these types of companies are those that have either had financial difficulties in the pass,those with zero understanding of how to manage money or just those who dont pay so they are classes as a high risk.
4.becuase they can.

That's the piece I'd change. I don't object to the principle of pay day loan companies, but their lack of principles. It's not the reasonable service they provide, it's the unreasonable rates that many of the people these vultures are feeding off probably don't even understand. Like most things in life, when you take something to its extreme edges, there's generally something out of balance.

 

[Massimo Giovanni]

Good points by South bank Hank & Barnablue: I don't know how the EU gets away with charging huge interest rates to Greece; to help Greece should they not try to keep the rate as low as possible?

 

[hockleyeast1964]

If people used these loans for what they were designed for i.e 1mth max then pay them off there would be no outcry.Unfortunately a high percentage of the people who take them out have no intention of paying them back... tough titties i have no sympathy.Blame someone else culture.

 

[South Bank Hank]

Just to make the point about 'reasonable'...

Mortgage:
*** 3%

Bank Loan:
****** 6%

Credit Card:
******************** 19.9%

Store Card:
****************************** 29.9%

Now bearing in mind, when you take out any of the above, you're generally going to look at each individual percentage point (even every first decimal point) and make a call. Hmmm... 7.8% versus 6.2% - the *******s are ripping me off! Then, bugger me, those store cards are really fleecing people!!

Hang on...

Quick Quid:
************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************
**************** 2,356%!!!!

(Cut and paste is awesome!)

 

[Yorkshire Blue]

It's not the service they provide, it's the ridiculous fees they're applying against vulnerable members of society. As Applelover says, it's legalised loan sharking. I'm a Conservative at heart and happy for businesses to make money, but these guys are just immoral and they need reigning in.

#creepingsharialaw

 

[applelover]

Must admit to sending the following ranty old man email to Ms Swinson MP last night

Hi Jo

Saw you on Newsnight tonight and it was a truly sorry and shameful display. One minute you're the 'new politics' and next minute you're an apologist for the exploitation of the poor. I hope you're enjoying coalition government.
...
I voted liberal democrat last time but the contemptible lack of any moral compass guiding your party means that I will not be making that mistake again.

Enjoy looking in the mirror tomorrow. Just think you might get offered a place on the Wonga board when you lose you seat at the next election.

Regards,

Don't suppose i'll get a reply but i'll post it if I do.

The only defence for traditional doorstop and new payday loans is that without them there would be a vacum that would be filled by loan sharks. However if we had robust credit unions in the is country then this could be avoided.

As the presenter,super sexy Emily Matliss, pointed out last night this government have been banging on about austerity and treating the nations finances like a household budget. However they have presided over an absolute explosion in this kind of lending. Its our version of subprime.

 

[Yorkshire Blue]

The difference between pay-day loans and the US sub-prime housing crisis that caused the banking ****-down that everyone got so annoyed about is that pay-day loans charged a more realistic rate of interest to cover the risk.

 

[hockleyeast1964]

I understand that everybody feels they deserve the best even if they don't earn it.I suspect most of these loans aren't for day to day living expenses but for luxuries .Unlucky!! do what everyone else did 20years ago,save up.

 

[Davros]

I'm on the fence on this one.

On one hand the rates charged, when viewed from the APR point of view are horrible, but if you read the Martin Lewis article, with reference to the £20 and a pint piece, it does make clearer sence.

Taking that side away, and if you still disagree with it, fine, but it is still one of the scenario's where people are very angry about it, but there is no easy solution.

If you ban APR's of over 100% for example, someone wanting to borrow £500 for 2 days would only have to pay back a max of £502.74, which would make it pointless for the lender once admin etc is taken out of the equation, and these lenders would not be able to provide a service which many people are relying on.

Unfortunately, these services offer many people a neccesary evil, when the banks, government and the rest of society will not lend them money. That doesn't mean i agree with their practices and morals, or would ever use them, but at the end of the day, if people need or want something that much, it is better these companies are high profile, rather than underground mafia style lenders.

 

[South Bank Hank]

I'm on the fence on this one.

On one hand the rates charged, when viewed from the APR point of view are horrible, but if you read the Martin Lewis article, with reference to the £20 and a pint piece, it does make clearer sence.

Taking that side away, and if you still disagree with it, fine, but it is still one of the scenario's where people are very angry about it, but there is no easy solution.

If you ban APR's of over 100% for example, someone wanting to borrow £500 for 2 days would only have to pay back a max of £502.74, which would make it pointless for the lender once admin etc is taken out of the equation, and these lenders would not be able to provide a service which many people are relying on.

Unfortunately, these services offer many people a neccesary evil, when the banks, government and the rest of society will not lend them money. That doesn't mean i agree with their practices and morals, or would ever use them, but at the end of the day, if people need or want something that much, it is better these companies are high profile, rather than underground mafia style lenders.

Interesting thoughts Davros.

I suppose the middle ground I always look for is a modicum of control that stops things spiralling out of all proportion and fairness, for instance, introducing a government controlled maximum return for the lender that still makes sense to the entrepreneur, balances against risk (to your and Yorkie's point) and is sensible for the borrower. At the moment, it's abused because it's too unregulated. And I hate regulation.

 

[MK Shrimper]

Interesting thoughts Davros.

And I hate regulation.

Hmm, maybe if there was a bit more of that and Reagan/Thatcher were told to bugger off back in the early 80s the world economic climate may be a bit more healthy.