2278% Apr Loan

[RJG18]

Just seen a TV ad for a company called "QuickQuid", who do payday loans. Small print at the bottom of the screen read "Typical APR 2278%".

Just to illustrate the scale of this, if you borrowed £10 over 3 years (I know you can't actually borrow over that period) then you would repay a total of £134,473 over the three years on your £10 loan.

[Once in a lifetime]

Check this site out play with the numbers:

http://www.providentpersonalcredit.com/ppct/d/?ref=GO_AT&st=provident%20money%20card&utm_source=google&utm_medium=ppc&utm_term=provident%20money%20card&utm_campaign=brand

I know someone that works for provident 2000% interest is very common.

but you must qualify for it by being £ucking poor.

[LittleSteroid]

Check this site out play with the numbers:

http://www.provident..._campaign=brand

I know someone that works for provident 2000% interest is very common.

but you must qualify for it by being £ucking poor.

madness

[NEO72]

Just seen a TV ad for a company called "QuickQuid", who do payday loans. Small print at the bottom of the screen read "Typical APR 2278%".

Just to illustrate the scale of this, if you borrowed £10 over 3 years (I know you can't actually borrow over that period) then you would repay a total of £134,473 over the three years on your £10 loan.

So I wasn't the only one watching top gear! There were a few ads, possibly for different sharks. Sure one of them had "always borrow responsibly" printed on the screen. If you looked up the definition of irony, I imagine this would be it..

[exiges]

Just seen a TV ad for a company called "QuickQuid", who do payday loans. Small print at the bottom of the screen read "Typical APR 2278%".

Just to illustrate the scale of this, if you borrowed £10 over 3 years (I know you can't actually borrow over that period) then you would repay a total of £134,473 over the three years on your £10 loan.

That's not a realistic illustration however, as these products are designed to be short term (ie. less than a month) loans, unsecured and delivered to you within 24 hours without any credit checks.

Ask yourself this, if you were in the business of lending money to people who couldn't provide any real form of credit history, wanted you to deliver £100 to them today (often in person), and you'd get your money back in a few days (maybe), how much would you want to charge to make it worth your while ? You certainly wouldn't be doing it for an annual APR of 10% earning you 75p now would you ?

And in many situations borrowing as little as £50 from them works out cheaper than defaulting with your bank and having to pay their fees.

Yes, the annual APR is horrific, but it's not an "annual" product.

Edited August 7, 2010 by exiges

[Zngland]

Just seen a TV ad for a company called "QuickQuid", who do payday loans. Small print at the bottom of the screen read "Typical APR 2278%".

Just to illustrate the scale of this, if you borrowed £10 over 3 years (I know you can't actually borrow over that period) then you would repay a total of £134,473 over the three years on your £10 loan.

Guess they're learning from the Bankers who charge 5% apr ,fail and then charge the taxpayer 2278bn % on every screw up ever made

so their chihuahua can have open heart surgery via bupa.

Gota love our world at the moment.., nobody can say it's not based on unsustainability. It's like watching the finality dished out to

Butch and Sundance with every foe positioning , to nuke your ass.

[ydbc]

There's a similar add for an outfit called wonga.com. Same interest rate, as far as I remember, so competition should soon bring those rates down to a more attractive percentage of about 2,250% APR???

Edited August 7, 2010 by ydbc

[Charlie The Tramp Returns]

Yes, the annual APR is horrific, but it's not an "annual" product.

To be fair Lenders have to state the APR by Law.

You certainly wouldn't be doing it for an annual APR of 10% earning you 75p now would you ?

Exactly.

[endgame]

Zero is zero for a reason. If you hit zero, it cant be fixed by just moving zero.

Your just one more loan from total default.

[okaycuckoo]

To be fair Lenders have to state the APR by Law.

I saw an ad like that today on TV: 2xxx% APR written in the small print - along with "Borrow responsibly". My application is "pending"!

It's clear this stuff is recommended as short term, but I'd like to see the APR stated in words by the voice-over rather than printed in tiny letters at the bottom of the screen. And the actor should also state that short term borrowing doesn't mean the debt isn't forever. I guess that would make the ad less ... effective. Nah, it would make the ad a total laugh - a FastShow parody of itself.

[Ah-so]

I saw an ad like that today on TV: 2xxx% APR written in the small print - along with "Borrow responsibly". My application is "pending"!

It's clear this stuff is recommended as short term, but I'd like to see the APR stated in words by the voice-over rather than printed in tiny letters at the bottom of the screen. And the actor should also state that short term borrowing doesn't mean the debt isn't forever. I guess that would make the ad less ... effective. Nah, it would make the ad a total laugh - a FastShow parody of itself.

But why have the actual APR spoken when it is clearly meaningless in the context. More meaningful (and understandable to the target audience) might be something like, "A typical loan of £200 for a month would require a full repayment of £220." That would be clear to everyone and hopefully bring an end to these endless payday loan threads.

[valueofnothing]

That's not a realistic illustration however, as these products are designed to be short term (ie. less than a month) loans, unsecured and delivered to you within 24 hours without any credit checks.

Ask yourself this, if you were in the business of lending money to people who couldn't provide any real form of credit history, wanted you to deliver £100 to them today (often in person), and you'd get your money back in a few days (maybe), how much would you want to charge to make it worth your while ? You certainly wouldn't be doing it for an annual APR of 10% earning you 75p now would you ?

And in many situations borrowing as little as £50 from them works out cheaper than defaulting with your bank and having to pay their fees.

Yes, the annual APR is horrific, but it's not an "annual" product.

Hmm but a lot of these products (especially from the money shop) allow you to roll over the loan. Look at the Debt Free Wannabee Forum of MSE and see how many people are stuck on these loans for a long time.

[RJG18]

So I wasn't the only one watching top gear! ....

Yes, but I'm not sure I can admit that? There is something that stigmatises one as a bit of a pikey for watching Dave during the day. (hence the nature of the adverts, I guess)

[Selling up]

But why have the actual APR spoken when it is clearly meaningless in the context. More meaningful (and understandable to the target audience) might be something like, "A typical loan of £200 for a month would require a full repayment of £220." That would be clear to everyone and hopefully bring an end to these endless payday loan threads.

I don't agree. I think the requirement for loan companies to state the APR is one of the best pieces of legislation of the last few decades.

It allows comparison of deals.

Otherwise it's not easy to choose between these two:

Loan A: "A typical loan of £200 for a month would require a full repayment of £220."

Loan B: ""A typical loan of £750 for three months would require a full repayment of £950."

Okay; if you are proposing to legislate a further standardisation: that all short term loan ads state the total payable on, say, £100 for a month, then fine. But don't remove the APR requirement unless it can be replaced by something better.

[RJG18]

That's not a realistic illustration however, as these products are designed to be short term (ie. less than a month) loans, unsecured and delivered to you within 24 hours without any credit checks.

Ask yourself this, if you were in the business of lending money to people who couldn't provide any real form of credit history, wanted you to deliver £100 to them today (often in person), and you'd get your money back in a few days (maybe), how much would you want to charge to make it worth your while ? You certainly wouldn't be doing it for an annual APR of 10% earning you 75p now would you ?

And in many situations borrowing as little as £50 from them works out cheaper than defaulting with your bank and having to pay their fees.

Yes, the annual APR is horrific, but it's not an "annual" product.

Yes, the annual example was for dramatic effect. but it illustrates how high these rates are.

The more realistic example is that some who is very poor, maybe o benefits, runs out of money and borrows £20 for a week or two, and then has to repay £40. If this person only has an income of £60 a week, then all they are doing is making the problem worse, and this loan will in itself cost them so much that they will need an even bigger loan next time.... borrowing £30 to repay £60, then £60 to repay £120, and ultimately default (or baseball bats).

[Ah-so]

I don't agree. I think the requirement for loan companies to state the APR is one of the best pieces of legislation of the last few decades.

It allows comparison of deals.

Otherwise it's not easy to choose between these two:

Loan A: "A typical loan of £200 for a month would require a full repayment of £220."

Loan B: ""A typical loan of £750 for three months would require a full repayment of £950."

Okay; if you are proposing to legislate a further standardisation: that all short term loan ads state the total payable on, say, £100 for a month, then fine. But don't remove the APR requirement unless it can be replaced by something better.

I think both are necessary for small loans. The AER is a fairly complicated way of explaining a loan that is short, but it is the only neutral way to actually compare different rates. AER is also probably over the heads of the intended audience, so I would be in favour of insisting that example loans and repayments are also included.