bobthe~ Posted July 22, 2009 Share Posted July 22, 2009 ...forget the history of religion...they have a valid point ....interest rates of 20% + and thereabouts on credit cards and loans sould be a criminal offence when base is 0.5%....more so when they hard sell the highest interest rate products to the poorest and least informed in society .....if this was a decent country these lenders would be in jail doing hard labour..and the people who really 'get my goat' are the money lenders on the till at Marks and Spencers when you pay for your shopping with a 'Switch' card they fiegn innocence to ask if you have a M&S card.....I always give them a look of contempt .....no amount of staff training in this lurid trade encourages me to that store on a regular basis...... I don't disagree entirely, but base rate at 0.5% is an artificial value, isn't it? It isn't the rate set by the market, it is the rate set by the govt to save their political skins and a belief that it will save the economy. Quote Link to comment Share on other sites More sharing options...
Warwick-Watcher Posted July 22, 2009 Share Posted July 22, 2009 I think some of you are being very cynical about this.Inner-city churches in particular have been speaking out for years against loansharks and the slightly more refined ones that wear suits and advertise on the telly. They aren't being inconsistent here. Are these the same Churches that beg for money on Sunday mornings and don't even give you a copy of the Big Issue in return? Are these the same Churches that run TV evangelism shows where they invite the gullible to hand over large amounts of money (tithes etc.) to them in return for "salvation"? You might as well give your money to Sky TV rather than a sky god! Quote Link to comment Share on other sites More sharing options...
South Lorne Posted July 22, 2009 Share Posted July 22, 2009 (edited) I don't disagree entirely, but base rate at 0.5% is an artificial value, isn't it? It isn't the rate set by the market, it is the rate set by the govt to save their political skins and a belief that it will save the economy. ..sterling 3 month LIBOR is just over 1% ...the US rates are just below ours and the Euro just above....so it's not just to do with our Nulabour 'wonderboys' ...and the important thing here is the margin to the lenders ...probably just under the 20% mark ...margins like this are criminal .....forget squabbling about religion and atheism ...the real nasty guys are these big margin lenders....throwing their business at anyone ...and when few pay back ..we the tax payers will have to go in to resccue these big nasty fat lenders....is that what you want ..?......better jail them now.... Edited July 22, 2009 by South Lorne Quote Link to comment Share on other sites More sharing options...
We're all dooomed!!! Posted July 22, 2009 Share Posted July 22, 2009 ..sterling 3 month LIBOR is just over 1% ...the US rates are just below ours and the Euro just above....so it's not just to do with our Nulabour 'wonderboys' ...and the important thing here is the margin to the lenders ...probably just under the 20% mark ...margins like this are criminal .....forget squabbling about religion and atheism ...the real nasty guys are these big margin lenders....throwing their business at anyone ...and when few pay back ..we the tax payers will have to go in to resccue these big nasty fat lenders....is that what you want ..?......better jail them now.... Frankly the margins you refer to I would imagine are charged by loan sharks (or credit and store card providers maybe). Not that I'm defending high street banks but I doubt they are imposing these 20% interest rates (if I'm wrong then please shout!). You have to be pretty dumb to borrow off such people and not expect to be clobbered. Its very simple really - don't get into debt with them!!! There is another factor here too - let's remember that defaults are rising and will rise further. Lenders don't want to over-commit any more so a certain margin has to be applied in order to cover some of these defaults. Quote Link to comment Share on other sites More sharing options...
Guest tbatst2000 Posted July 22, 2009 Share Posted July 22, 2009 Jesus saves Not on my salary he couldn't. Quote Link to comment Share on other sites More sharing options...
South Lorne Posted July 22, 2009 Share Posted July 22, 2009 (edited) Frankly the margins you refer to I would imagine are charged by loan sharks (or credit and store card providers maybe). Not that I'm defending high street banks but I doubt they are imposing these 20% interest rates (if I'm wrong then please shout!). You have to be pretty dumb to borrow off such people and not expect to be clobbered. Its very simple really - don't get into debt with them!!! There is another factor here too - let's remember that defaults are rising and will rise further. Lenders don't want to over-commit any more so a certain margin has to be applied in order to cover some of these defaults. .....talking specifically about credit cards where Barclays will charge up to and around 22% for these cheque drawdowns ...and even cash withdrawals ...this cannot be justified if they are paying inter bank rates LIBOR circa just over 1% to fund... again it is the misinformed and less literate financially who are targetted.... Edited July 22, 2009 by South Lorne Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted July 22, 2009 Share Posted July 22, 2009 What a load of boll*cks. Typical Guardian level of journalistic inaccuracy. Whenever you get a socialist newspaper siding with the god-squadders you know there's some real rubbish about to be written. Quite. Even if they found a way to extract that kind of return, in this kind of environment thats a pretty shoddy risk premium. Doesnt zoopla (not zoopla, cant remember the name of the online lending thingy) give rates of 10%+ and have a better loan book than the average bank? Quote Link to comment Share on other sites More sharing options...
Moley Posted July 22, 2009 Share Posted July 22, 2009 Quite. Even if they found a way to extract that kind of return, in this kind of environment thats a pretty shoddy risk premium. Doesnt zoopla (not zoopla, cant remember the name of the online lending thingy) give rates of 10%+ and have a better loan book than the average bank? Weren't that awful Cattles crowd charging 70% interest on amounts like £20? Quote Link to comment Share on other sites More sharing options...
howarden Posted July 22, 2009 Share Posted July 22, 2009 There are sound reasons for capping interest rates on loans. Indeed, the whole idea about why this would be good was recently discussed on Karl Denninger's blog. If interest charges are capped at say base rate + 10%, then it puts a limit on to how much risk a lender is willing to take. If you can't make a profit on a 10% margin, in effect you are saying that you are not confident in being repaid. In one go, you destroy the subprime and other speculative loans that have been the cause for the bubble of recent years and the subsequent collapse when these loans inevitably default. The only refinement needed is that the retail rate would need to track the base rate so that interest rates could rise to combat inflation. This is the best reply, cap the interest rates and you close off a whole load of risky lending which needs the high interest rates to cover the defaults and expensive collection methods. No more doorstep lending, subprime mortgages or places like Brighthouse and Yes Car Credit. Seems fine to me, forces saving and deleverages the whole system. Quote Link to comment Share on other sites More sharing options...
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