Payday Loans APR% makes from a good read & shocking

if you bothered 100 pounds this is much you pay back its absolutely nuts how is this stuff legal 59% APR


Borrow £100 and make no repayments

After 1 year Owe £4,200
After 2 years Owe £180,000
After 3 years Owe £7,500,000 (£7 million)
After 4 years Owe £315,000,000 (£315 million)
After 5 years Owe £13,000,000,000 (£13 billion)
After 6 years Owe £557,000,000,000 (£557 billion)
After 7 years Owe £23,500,000,000,000 (£23.5 trillion)

shopaholic01

Deleted User wrote: »

if you bothered 100 pounds this is much you pay back its absolutely nuts how is this stuff legal

It's never a good idea to bother money, it's awfully tetchy.

Wabbit Ears

They're not designed as long term loans and the Apr is clearly advertised.

High risk, high return, increasing over longer periods of time as risk of non repayment increases
They're meant to be extremely short term but still

bluewolf

bluewolf wrote: »

High risk, high return, increasing over longer periods of time as risk of non repayment increases
They're meant to be extremely short term but still

aren't they knowing for trapping & preying on vulnerable & poor people

I don't really see how they're "trapping and preying" since they make it very easy to see what you would need to pay back beyond simply declaring the apr. But I do imagine you could easily get caught into a dangerous cycle using them, yes.

My name is URL

After 7 years Owe £23,500,000,000,000 (£23.5 trillion)

Can I pay it of by €50 per week?

Guy:Incognito

The whole point is not to borrow money for longer than a few weeks/till the end of the month. They are called payday loans for that exact reason.


Is that what happened to America? First week in office, Obama borrows a few hundred quid to do him till he got his first pay cheque, then boom, trillions owed.

shruikan2553

Deleted User wrote: »

aren't they knowing for trapping & preying on vulnerable & poor people

They tend to be frequented by the poor and vulnerable but I wouldnt say they trap and prey on them. They just show their ads during Jeremy Kyle and you are free to get one or not.

Tail Docker

Amoral scumbaggery IMO, but then I'm an eejit. I could do this - I have enough dosh, I know enough people, but I'd rather eat grass than make a living this way.

corkgsxr

And is 59% not one of the lower ones.

As far as I remember I saw ones over 200%

beano345

Hundreds of them in Toronto offering payday loans usually every $100 you borrow you owe $120 back with heavy penalties for being late with a payment.I got caught up with them over there, you kind of end up in a vicious circle with them in that when you pay back the loan you need to take out another one just to live,most of them are owned by big banks.

not yet

shopaholic01 wrote: »

It's never a good idea to bother money, it's awfully tetchy.

I've heard nasty stories of it turning on people for no reason, better left alone and not bothered.

Guy:Incognito

Tail Docker wrote: »

Amoral scumbaggery IMO, but then I'm an eejit. I could do this - I have enough dosh, I know enough people, but I'd rather eat grass than make a living this way.

Why not lend your money to the same people at really low interest rates?

Sure what could go wrong, they are only high risk borrowers because people are picking on them.........

bnt

The figures in the OP are not the result of a 59% APR (annual percentage rate) - they are more like Wonga's 4200% effective APR that hit the headlines a couple of years ago.

If you borrow €100 at 59% APR, after a year you pay back €159. A 4200% APR corresponds to about 36.6% per month. :eek:

Tail Docker

Guy:Incognito wrote: »

Why not lend your money to the same people at really low interest rates?

Sure what could go wrong, they are only high risk borrowers because people are picking on them.........

As a former collector of out-standing monies, I can tell you that even if you lend it at 0%, you still need to make some peoples lives a misery to collect it back. There's nicer ways to make a living.

Cedrus

Deleted User wrote: »

aren't they knowing for trapping & preying on vulnerable & poor people

bluewolf wrote: »

I don't really see how they're "trapping and preying" since they make it very easy to see what you would need to pay back beyond simply declaring the apr. But I do imagine you could easily get caught into a dangerous cycle using them, yes.

I think the key words here are "vulnerable & poor people" rather than "trapping & preying", although the effect is the same.