1291% apr loan

[Arsonist]

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

Spoken at the grand old age of 24 But even me at 28 has to agree. My first car was a knackered fiesta mk3, which I drove until its death this time last year. Even now my car's only a 2.5k Mazda and I work full time for decent money and could have realistically afforded a 20k+ car on finance. But that's not a suitable use of my money, and I'd have been paying a hefty amount in interest.

 

[Pawnless Endgame]

What the hell?

1300% interest on a loan, and yet if you take out an ISA, you're lucky to get 0.6% interest!

 

[dowie]

What the hell?

1300% interest on a loan, and yet if you take out an ISA, you're lucky to get 0.6% interest!

well I guess you could cut out the middle man if you like - go find some chavs and offer to lend them money, as you're not really an established/legit business you'd perhaps want to hire a couple of goons for collections too - perhaps they could go door to door on a weekly basis and collect from your clients, obviously they're often too poor/stupid to pay the whole loan off so you could build up a nice little income stream from it

from there you could expand your business, perhaps use your goons to offer protection/security to local businesses, get into the scrap metal business or maybe open a garage and sell dodgy cars you bought at auction (discounts available for cash, obviously be aggressive with anyone who wants to return them when they break down)...

 

[platinum87]

What the hell?

1300% interest on a loan, and yet if you take out an ISA, you're lucky to get 0.6% interest!

Why am i the only person who finds the following annoying while everyone is talking about some moral problems?

Below is their quote about their example APR

Representative Example: Loan amount £250 repayable over 6 months. Total amount repayable £440.05 in 6payments of £73.35. Interest 292% p.a. fixed. Representative 1291% APR

And if i get a quote for £250 over 6 months (using their calculator)

6 MONTHLY REPAYMENTS £82.76 ---- TOTAL INTEREST £246.61 -----TOTAL AMOUNT TO REPAY £496.61

If i calculate based on 1291% APR, for the same £250 over 6 months

Total monthly payment: £272.36 ---- Total Interest = £1,384.17 ----- Total Repayment = £1,634.17

If i use a calculator and enter an APR of 292%

Total monthly payment: £83.41 ---- Total Interest = £250.47 ----- Total Repayment = £500.47

3 Calculations that are suppose to be the same are in fact different? And a 4th calculation using 1291% APR being insanely different

Maybe the vodka has messed up my brain permanently, but i do not think this is the case.

On my payslip once they had deducted 72 seconds, showing 0.99 of an hour. After i was done i left the HR woman crying, and the people at head office crying also!

 

[Pudney]

Why am i the only person who finds the following annoying while everyone is talking about some moral problems?

Below is their quote about their example APR



And if i get a quote for £250 over 6 months (using their calculator)



If i calculate based on 1291% APR, for the same £250 over 6 months



If i use a calculator and enter an APR of 292%



3 Calculations that are suppose to be the same are in fact different? And a 4th calculation using 1291% APR being insanely different

Maybe the vodka has messed up my brain permanently, but i do not think this is the case.

On my payslip once they had deducted 72 seconds, showing 0.99 of an hour. After i was done i left the HR woman crying, and the people at head office crying also!

They're not the same calculation. The first (and the 292% or 1291% rates) are "representative" and not actually tied into the quote you're getting. Change the £250 to £500 and the example won't change. Hopefully that'll help!

 

[platinum87]

They're not the same calculation. The first (and the 292% or 1291% rates) are "representative" and not actually tied into the quote you're getting. Change the £250 to £500 and the example won't change. Hopefully that'll help!

I know the example does not change, but their example, and their quote for the same amount are different.

If i calculate based on their example (using different online calculator with same figures) it is also different.

How to explain that without "aliens" meme?

 

[Tefal]

From wiki

A Representative APR is a financial service concept in which credit or loan interest rates quoted through advertising media are required to take into account all charges associated with a product, in addition to the interest rate.

So it may be theres some fees included in the Apr that won't be in your interest calc

 

[Clearcut]

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?

That was a 'close thread' post if ever there was one.

 

[wolfie138]

Spoken at the grand old age of 24 But even me at 28 has to agree. My first car was a knackered fiesta mk3, which I drove until its death this time last year. Even now my car's only a 2.5k Mazda and I work full time for decent money and could have realistically afforded a 20k+ car on finance. But that's not a suitable use of my money, and I'd have been paying a hefty amount in interest.

i think that's why appreciate all my stuff all the more - cos i worked for it and saved up, and when i finally got the item, it meant that much more. if people held on and saved up for their £700 iphones or whatever, whent hey finally got them they'd probably appreciate them a lot more and take more care of them etc.

 

[Clearcut]

To be fair wolfie, I think a phone is a bad example. If we all did that I still wouldn't have reached the iphone 4.

 

[MikeTheNative]

I'm not sure where you guys are getting the idea about young people all running about in Audis and BMWs. I'm 23 and I would say only a handful of the people I know have the stereotypical expensive lease cars while still living at home. The majority of the ones running around in 66 plate A3s and 1 series have rich parents who just bought them the car.

 

[McGray]

Aren't these short term loans? You'd expect that level of APR would you not?

 

[adolf hamster]

I'm not sure where you guys are getting the idea about young people all running about in Audis and BMWs. I'm 23 and I would say only a handful of the people I know have the stereotypical expensive lease cars while still living at home. The majority of the ones running around in 66 plate A3s and 1 series have rich parents who just bought them the car.

i've seen it be more like brand new small cars, corsa's and suchlike as opposed to premium brands.

personally i'm happy in my 11 year old 3 series, which for the record has zero finance and wasnt bought by parents.

 

[MikeTheNative]

i've seen it be more like brand new small cars, corsa's and suchlike as opposed to premium brands.

personally i'm happy in my 11 year old 3 series, which for the record has zero finance and wasnt bought by parents.

I've had my 07 Focus for 4 years now, so far it's cost me services, petrol, a wiper and two tyres. I would love a nicer car but can't justify the expense. I would definitely agree about phones though, the amount of people you see who have £40+ a month phone contracts is ridiculous.

 

[adolf hamster]

I've had my 07 Focus for 4 years now, so far it's cost me services, petrol, a wiper and two tyres. I would love a nicer car but can't justify the expense. I would definitely agree about phones though, the amount of people you see who have £40+ a month phone contracts is ridiculous.

indeed, as i said earlier a mate of mine took out a contract for an iphone after he'd already been shafted by the contract with his previous phone (a deal for £30/m for 500mb data doesn't look so good after 2 years), and i know full well when he did it he was perfectly capable of paying up front but his excuse was "i know it's more expensive overall but i didn't want to pay that much up front"

whereas i bought a z5 premium round about the same time, and the carphone warehouse were confused as hell at the idea i just wanted to pay them up front and walk out without signing up to contracts etc. i wouldn't even have done that had my z2's screen not died (i since replaced it with a £10 jobbie off amazon but ygwypf and it glitches like hell, useful for a backup though). i don't plan on replacing the z5 any time soon either.

and my phone contract is £5/month with giffgaff (not exactly a heavy user, we've got 50mb fibre at home if i wanna use the internet)

guess i'm lucky having been raised by an accountant that the idea of being in debt to people makes me uncomfortable.

 

[tom_e]

Aren't these short term loans? You'd expect that level of APR would you not?

Yes but don't let that get in the way of a good old "Look at the big mean business providing a service, expecting to make a profit and screwing the little guy!!!11!1!" witch hunt.

 

[adolf hamster]

Yes but don't let that get in the way of a good old "Look at the big mean business providing a service, expecting to make a profit and screwing the little guy!!!11!1!" witch hunt.

tbf it's kinda justified, i can't think of any scenario where a payday loan is the only legitimate option. these people prey on those who have poor money management skills, and no friends/family from whom they could borrow the same amount.

 

[mattpj]

The market doesn't force people to take these loans, the terms and conditions are understandable - the APR has to be there by law but it is a short term loan.

If a friend needed a loan, I would not be advocating this direction for them. All mentioned in the thread are credit cards for example - yes their APR is far lower in most cases. However, it doesn't solve those who can't get a credit card or have already maxed out their card. They end up turning to loans like Sunny. If used as they should be - E.G. pay it back on Payday and don't roll it over or take out a bigger loan again, then they should work as advertised.

Offering a service that you are free to use as the next person isn't preying on the needy. The latter part of my last paragraph does 'take advantage' of those who do mismanage money. Even then, you aren't forced to take a bigger loan. Force being the key part for me.

Rather than paternally expecting people to do things that don't further a business, perhaps the individuals who decide to use it should take more responsibility? In the form of 1) Paying it off when required 2) Not using the loan in the first place or 3) Realising they have an issue with income or expenditure and deal with it accordingly.

 

[mattpj]

Yes but don't let that get in the way of a good old "Look at the big mean business providing a service, expecting to make a profit and screwing the little guy!!!11!1!" witch hunt.

The OP legitimately thought that someone would be paying back 13k on a 1k loan. I don't even think you'd find that with a criminal loan shark...

 

[Deleted member 66701]

So what's the other option? Not eating? Not being able to afford the bus fare to get to work? Letting the electricity or gas run out? Not being able to pay that month's rent?

Of course, a solution would be a decent living wage/citizens income, workers owning the means of production and zero profiteering from basic necessities (social housing, utilities, basic food stuffs etc) but that's a whole new thread.