Yup, though they're really aimed at people wanting short term cash until payday - sadly these people won't pay much attention to the rates so the market for these things is rather inefficient.... I would however expect them to still have higher than usual rates as the people who go for these things are likely utter muppets when it comes to money and likely to default.
1291% apr loan
- Thread starter leemk
- Start date
Yup, though they're really aimed at people wanting short term cash until payday - sadly these people won't pay much attention to the rates so the market for these things is rather inefficient.... I would however expect them to still have higher than usual rates as the people who go for these things are likely utter muppets when it comes to money and likely to default.
Soldato
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You what!!!
Just to go out and have a drink?
If you can't afford something you go without until you can, simple. Especially when it comes down to being able to go out for a night.
What you seem to be forgetting, is that this is the year 2017 and the young'uns are of the new "consumer, want it now, can't wait, won't wait" mentaility. The same people who buy brand new £700 phones every year and buy £40k first cars on PCP with mum and dad as guarantors.
If he wants a night out, he jolly well has a night out....money or not!
Soldato
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Then the parent's can't understand why the debt collectors going after them as it's their kid's car.
Because the DFS sale ends soon and we need that corner sofa right now!
Deleted member 66701
Deleted member 66701
It just sounds a lot due to the short term of the loan.
If a mate asked to borrow 50 quid until payday in a weeks time and offered to pay you back 60 quid on pay day, that wouldn't sound unreasonable would it?
It does however work out at over 1000% apr.
If a mate asked to borrow 50 quid until payday in a weeks time and offered to pay you back 60 quid on pay day, that wouldn't sound unreasonable would it?
It does however work out at over 1000% apr.
This does appear to bit of a phenomenon with the younger generation, when I was 17 (about 7 years ago) we all got knackered old bangers and sorted them out ourselves, Non of this brand new 17k cars on finance.
You'd never get a payday loan to go out for a drink either, you did it the correct way with your EMA
You'd never get a payday loan to go out for a drink either, you did it the correct way with your EMA
Deleted member 66701
Deleted member 66701
This does appear to bit of a phenomenon with the younger generation, when I was 17 (about 7 years ago) we all got knackered old bangers and sorted them out ourselves, Non of this brand new 17k cars on finance.
You'd never get a payday loan to go out for a drink either, you did it the correct way with your EMA
I used to get loads of pay day loans - but I had a very understanding boss
I used to get loads of pay day loans - but I had a very understanding boss
I knew of people that did but I always had a "if I can't afford it I can't have it" mentality.
I think a friend of mine actually ended up in trouble with debt collectors because of a loan for a night out, he always was a little bit of an idiot though it wouldn't Surprise me if he still hasn't paid them.
Soldato
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You've hit the nail on the head.....that's pretty much what he says. He's happy to pay an extra £10 back if it means he can go out on the booze.
Deleted member 66701
Deleted member 66701
Ignore the interest for short term loans.
Take my example above. What would consider a reasonable apr for a loan? 4.9%? Ok, so we lend a chap 50 quid to tide him over until pay day and charge him 4.9% apr for the privilege. He then pays the loan back a week later, 50 quid plus 4 PENCE interest. Who in their right mind is going to lend 50 quid to someone for a measly 4 pence?
Should just get a credit card if he always pays it back when he gets paid.
Or just whore himself out for free drinks
It doesn't matter whether you can repay the principal. What matters is whether you can pay back the interest. Lenders don't care if you can't repay the principal - that's an asset as far as they're concerned. It's only when you can't repay the interest that they'll be unhappy.
Exactly, all types of loans have their uses, you just need to use the right type of loan for the job. Small loans with short payback periods are what payday loans are meant for, for larger sums they're ridiculous. But equally a bank loan for a small (or large) sum are also not suitable. Use the right tool for the right job and all that.
Soldato
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It's different now, but back in the day I worked with someone who didn't have much, he didn't fritter it away he just had a wife and young kid, a very modest mortgage on a not very nice two bed terrace on a dodgy street, and he kept his £300 banger of a motor going from one week to the next with gaffer tape and chewing gum.
His life was a right slog, literally pay day to pay, he even used to borrow the odd tenner of an old chap we worked with towards the end of the week when his wages had run out. He was a massive Metallica fan and one day he came in to work and announced he was going to the Monsters of Rock festival (what is now called Download) to see them, he'd borrowed £300 on a short term loan to pay for booze, festival tickets, extras etc..
In one sense I couldn't blame him because he had nothing and never did anything nice like that, life is pointless if you're just slogging away with no money for fun. On the other hand he ended up selling his hi-fi and music to pay it back because he couldn't find the spare cash in his wages. He was probably worse off in the end, but such is life for many people like him in food bank Britain.
His life was a right slog, literally pay day to pay, he even used to borrow the odd tenner of an old chap we worked with towards the end of the week when his wages had run out. He was a massive Metallica fan and one day he came in to work and announced he was going to the Monsters of Rock festival (what is now called Download) to see them, he'd borrowed £300 on a short term loan to pay for booze, festival tickets, extras etc..
In one sense I couldn't blame him because he had nothing and never did anything nice like that, life is pointless if you're just slogging away with no money for fun. On the other hand he ended up selling his hi-fi and music to pay it back because he couldn't find the spare cash in his wages. He was probably worse off in the end, but such is life for many people like him in food bank Britain.
I watched a program on these companies almost all of them were foreign (American I think) and a hole bunch were owned by one main company.. Most had no real UK presence either.. I think the government should ban the lot of them (that are foreign)
Soldato
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Yeah quite a few of my colleagues did this at my first job a couple of years ago. We were all around the same age (18-22 or so) 3 or 4 members of the 9 man team were seemingly always using payday loans. Now 4 of them are on benefits, (i'll let you guess which 4), 3 others are doing well for themselves and I drive a 340i
#MotivatedByObjectsBut the loan term is like 14 days.
Where a 5%Apr return would be pennies.
They are required by law to show an APR which understandably for a 2 week loan is going to be ludicrous because it's not meant for that