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Us Payday Loan Firms Plan Rapid Expansion In Cash-Strapped Britain

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http://www.guardian.co.uk/money/2011/feb/11/us-payday-loan-firms-expansion

• Credit at 30% a month can take minutes to secure

• One group sees opportunity for 800 new branches in UK

US corporations offering loans to poorer customers that often charge more than 30% in interest a month are planning a massive expansion in the UK, prompting warnings that thousands of families could become trapped in a cycle of debt, a problem already seen in America.

One large "payday loan" group told investors it aims to almost quadruple its UK presence – opening some 800 stores and expanding into deprived rural communities – to target families affected by redundancy or loss of income.

Payday lending, in which relatively small sums are offered for the short-term at a cost regularly exceeding 30% a month, is hugely controversial in the US. A number of states have passed laws capping maximum interest rates or limiting the number of loans per customer.

The UK industry is growing fast – one web lender, Wonga.com, began sponsoring a Premier League football team, Blackpool, less than three years after starting business – but remains relatively small.

A US loans giant, Dollar Financial, which already operates 370 Money Shops in the UK, has just bought PayDay UK, the biggest British internet payday operator. Last month its chief executive, Jeffrey Weiss, told investors that recession-hit Britain – where the sector is relatively unregulated compared with the US – was a prime market. He said: "I think we're maybe 25% of the way towards a full country build-out in the UK. That includes having large stores in highly dense areas and – an area we really haven't moved to yet – smaller stores in more rural areas.

"If you extrapolate from our current 350 stores I think there is a potential universe for us of 1,200 locations."

A business venture based entirely on extrapolation, I hoped the purchased the best Bloo Loo kit for doing these sorts of projections.

An unregulated market Jeffery must be having little wet dreams over the UK.

Anyone know if any of the big Wall Street banks like JP Morgan or the Giant Squid are involved in any of these types of businesses?

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Us 'Oldies' should hold our heads in shame, that more and more decent folk are being forced into the hands of these sharks.

I'm really sorry...What more can one say?

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This must be the 'rebalancing' Dave and Osborne keep going on about.

Hurrah for their innovative entrepreneurs!

(This post is sponsored by Wonga.com)

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Anyone know if any of the big Wall Street banks like JP Morgan or the Giant Squid are involved in any of these types of businesses?

JPM run the food stamps system in the US - create a problem and then benefit from it.

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30% a month sounds like a bargain compared with ads on telly for 2600%. Wonga's website is showing a "representative" rate of 4214%!! AND they have a link about "responsible lending" :lol::lol:

Legalised loan sharks except I guess they won't break your legs.

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The reason these loans seem expensive is because they are short term loans.

For instance, I have a Mastercard with Cashplus, who allow me borrow up to £300 over a weekend (Borrow on Friday pay back on following Tuesday). The headline rate in APR is 730%, however for the facility of being able to borrow £300 over the weekend I am charged £16.00

This is easier and cheaper than my overdraft from the nationwide.

Edited by dukat

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Wonga has an ex Goldman Sachs member on the board... the rest of the investors are wealthy individuals....

The scum running these legal loan sharks need to take a long hard look in the mirror.... charging poor people 4000% may not be illegal but it sure as $hit is immoral.

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Anything over 25% (at this time of .5 base) is imoral especially when aimed at the poor.

These types of loans should be fixed fee so that they dont run away to become some huge amount.

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A Mafia loan shark usually will charge 6-10% per week compounded weekly. At first they will give you two weeks, for example you borrow $2000 you will owe them $2100 in 2 weeks. If you can only pay $600 then you will owe $1500 plus the 5% interest per week until paid, so if you make another $600 payment in 2 weeks you will still owe around $1100.

Loan sharks in the US are primarily controlled by the NY "families." I suspect this will be an extension of that particular group. My guess is that the Koalishon will step in as the "families" have hitherto never gained traction in this country. The Banksters would, if anyone, move into this area if they thought it would be worthwhile. As it is, they are satisfied with emptying the tills from the top.

http://mafiatoday.com/canadian-mafia/mafia-linked-loan-shark-charged/

Edited by Realistbear

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The reason these loans seem expensive is because they are short term loans.

For instance, I have a Mastercard with Cashplus, who allow me borrow up to £300 over a weekend (Borrow on Friday pay back on following Tuesday). The headline rate in APR is 730%, however for the facility of being able to borrow £300 over the weekend I am charged £16.00

This is easier and cheaper than my overdraft from the nationwide.

I've read your post through four or five times, still can't believe what I'm reading. We don't get many posts like this on HPC thats for sure.

Do you do this regularly, borrow £300 on friday and pay back £316 on Tuesday.

If you do STOP IT! :angry:

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These legal loan sharks highlight the glaring gulf between legality and morality. There are other repugnant companies such as Brighthouse that sell consumer goods to low income households for 30% apr.

As long as these parasitic entities are allowed to flourish in the UK I can only view the whole government as digusting hypocrites. Parliment is a charade filled with con men and big business stooges.

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These legal loan sharks highlight the glaring gulf between legality and morality. There are other repugnant companies such as Brighthouse that sell consumer goods to low income households for 30% apr.

As long as these parasitic entities are allowed to flourish in the UK I can only view the whole government as digusting hypocrites. Parliment is a charade filled with con men and big business stooges.

Quite agree.

Not much differnt to the banks that take taxpayer money at miniscule percentrages and then go and charge at 20-30% on credit cards. They put the squeeze on small business to push for these handouts whilst racheting up the fees and rates. This whole system is bent as a nine bob note.

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Guest eight

The reason these loans seem expensive is because they are short term loans.

For instance, I have a Mastercard with Cashplus, who allow me borrow up to £300 over a weekend (Borrow on Friday pay back on following Tuesday). The headline rate in APR is 730%, however for the facility of being able to borrow £300 over the weekend I am charged £16.00

This is easier and cheaper than my overdraft from the nationwide.

If you breach your overdraft, HSBC will charge you £25 for borrowing £10 for 1 day. I actually think most loan sharks would baulk at that one.

eight

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Guest sillybear2

"And Jesus went into the temple of God, and cast out all them that sold and bought in the temple, and overthrew the tables of the moneychangers, and the seats of them that sold doves, And said unto them, It is written, My house shall be called the house of prayer; but ye have made it a den of thieves."

http://en.wikipedia.org/wiki/Cleansing_of_the_Temple

The only time JC really decked somebody.

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The reason these loans seem expensive is because they are short term loans.

For instance, I have a Mastercard with Cashplus, who allow me borrow up to £300 over a weekend (Borrow on Friday pay back on following Tuesday). The headline rate in APR is 730%, however for the facility of being able to borrow £300 over the weekend I am charged £16.00

This is easier and cheaper than my overdraft from the nationwide.

This makes no sense?? :huh:

I have a £1000 overdraft facility with my bank, Santander. IF I use it I am charged 50p/day upto a maximum of 10days (i.e £5/month). Does your bank not charge a similar reasonable amount?

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US corporations offering loans to poorer customers that often charge more than 30% in interest a month are planning a massive expansion in the UK, prompting warnings that thousands of families could become trapped in a cycle of debt, a problem already seen in America.

As if there aren't already thousands of families already trapped in a cycle of debt already seen in the UK. Enough already.

These companies to be run by bankers who have to be paid so much in wages and bonuses or they'll go off and work in Dubai. If only they would just do it.

'Tis truly Treasure Island.

Edited by billybong

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"And Jesus went into the temple of God, and cast out all them that sold and bought in the temple, and overthrew the tables of the moneychangers, and the seats of them that sold doves, And said unto them, It is written, My house shall be called the house of prayer; but ye have made it a den of thieves."

http://en.wikipedia.org/wiki/Cleansing_of_the_Temple

The only time JC really decked somebody.

And the money changers were spread throughout the world becoming like their ancient ancestors and being an unpleasant stench in the nostrils of God.

Please allow me to introduce to you the descendants of those evil doers of old: The Banksters!!

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These high APR short term loans are exploiting the poor by the rich that feed off them......people that use this exploitative service usually do not have access to any sort of bank finance or overdraft facility.....this is 'easy money' for the lenders and an expensive mistake for the needy borrowers, that can often lead to them digging a deeper hole for themselves..... :huh:

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Anything over 25% (at this time of .5 base) is imoral especially when aimed at the poor.

These types of loans should be fixed fee so that they dont run away to become some huge amount.

So, if I lend someone with a very poor credit rating and a history of defaulting £200 for a month, how much should I charge as a premium for that month to cover

my office costs

wages

advertising

business rates

bad debt

my accounting fees

the cost of my money

God forbid, profit ?

These seem horrific, but if paying £60 in interest saves £200 in bank charges for an unauthorised overdraft, or the alternative is Bermondsey Dave and Knuckles..... aren't they safer.

In all seriousness, it's not a pretty touchy feely market for the nice people - but pretending that is anything other than a high premium high risk market and that the margins must therefore be higher is naive in the extreme...... there is a place in the market for these lenders, and they ARE regulated to an extent..... yes, the rates are high, you ask yourself why - it's not that they can charge what they like, as if you could make a good consistent profit by charging less, market economics mean that someone would do it.....

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So, if I lend someone with a very poor credit rating and a history of defaulting £200 for a month, how much should I charge as a premium for that month to cover

my office costs

wages

advertising

business rates

bad debt

my accounting fees

the cost of my money

God forbid, profit ?

These seem horrific, but if paying £60 in interest saves £200 in bank charges for an unauthorised overdraft, or the alternative is Bermondsey Dave and Knuckles..... aren't they safer.

In all seriousness, it's not a pretty touchy feely market for the nice people - but pretending that is anything other than a high premium high risk market and that the margins must therefore be higher is naive in the extreme...... there is a place in the market for these lenders, and they ARE regulated to an extent..... yes, the rates are high, you ask yourself why - it's not that they can charge what they like, as if you could make a good consistent profit by charging less, market economics mean that someone would do it.....

I have a some sympathy with these pay day loans. The root of the problem is that admin costs have to be incuded in the RPI and produces very large APR's

Say as a friend you turn up at my house and need to borrow £100 for the weekend. I say fine I need to pop down to the cashpoint in my car , so as you are a friend just buy me my next pint lets say thats worth £3

So £3 on £100 for 3 days is:-

(1 + 3/100)^365/3 -1 X 100 = 3,546% APR

If I charged 10% interest for 3 days I would get around 10p for the 3 days..not worth the agro

I do feel that they should be banned from dealing with the same customer who reapplies month after month. Because this type of finance has its uses but only in a a very limited number of circumstances. ie to avoid very heavy bank charges and certainly not as a regular means of finance.

Pawn broking is far better for such people if of course they can come up with something of value rates are typically 6% per month

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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