blonde poker forum

The heat seems to have risen on these in the last day or two with the church sticking their oar in.

Yes they are expensive, but major financial organisations simply don't lend a few hundred quid for a month or whatever, are they such a bad thing? Better than illegal alternatives surely?

Arguments tend to focus on the large % interest being charged, in my view if I needed to take one of these I would view the 50 quid or whatever a fee rather than a %.

What you say? Are they taking the piss or not?  ;carlocitrone;

1300% interest is only going to be paid by people who have no choice.

/debate IMO.

But that is my point. No major financial organisation is going to give a loan for 200 quid for 3 weeks at 5 %. So what is your alternative suggestion?

Your /debate would be valid if it was possible.

I don't particularly care either way about this either way myself really. The media uproar has caught my eye that's all.

Morally corrupt, legally allowed.

Feeding on poor peoples needs in this economic mess we find ourselves in, shameful and sad.

How much money do they suck out of people? seems alot based on how many sporting teams they want/do sponsor.

So why haven't companies come in and been doing it for 25% or whatever if they were taking the piss so much? 25% seems pretty good to me....

They are restricted on what they can charge people on loans, but these "new fad" pay day loans are exempt from it, law needs change.

Major financial organisations do give 200 quid loans for a short period of time - overdrafts and credit cards.

And even when they are charged for, and even when they are 'relatively' expensive they're still nowhere near the payday loans figures.

Payday loan companies are basically loan sharks with a credit licence

If they get enough work in, they can charge 30% and make a tidy sum overall. No different to a casino's roulette table: small profit but guaranteed; the more they play, the more you win.

The best businesses spot a gap in a market and fill it. These loan companies only thrive because of the misfortune of others.

If these people could, they'd be using credit cards at 27% and paying off as much as they could afford over a longer period or paying the lot off interest free after they get paid.

But there is no option; no other recourse. They must pay fifty times more interest than the rest of society.

I follow Paul Nicholson on twitter, the Darts prick.

He was going on about how he had morals and didn't think Eric Bristow was a good person for slagging him off. I felt like telling the ***** that being sponsored by a money lending company (like he is) makes him bottom of the moral list.

Like I said I have no view either way before you start jumping all over my arse.

But if they were so bad a more competitive way of lending would have appeared by now surely?

It would be pretty easy to lend money at much lower rates, but it would take the average person who uses Wonga etc.. to stop and think for 5mins which is sadly asking alot.

In Germany, many US states and Canada, there are usury laws that restrict the maximum interest rate paid on a loan. We should have the same laws here. I don't believe Wonga et al. can't survive charging 200% APR, rather than 1000+.

Yeah same here in England, but for some reason Wonga type new money lenders are not under the law, seems unfair.

Credit Unions try but don't have the financial muscle to compete with the likes of Wonga.

Sorry, Woodsey. Wasn't having a personal pop. No botty jumping intended.

You lit a blue touch paper, as you know :)

I think the market will sort itself out eventually.

Anyone need to borrow up to £1k at 500%  ;whistle;  Seems like a good deal  ;danafish;

http://www.bbc.co.uk/news/business-23078746

interesting article on how wonga works.

Is there? I thought it was only Credit Unions that have a legal cap?

They are fine imo.

Guy needs £200 to get to pay day and they provide it.  Charge him £30 to reflect the much higher rate of default than a normal loan.  The APR only looks bad because it is an annual rate and the loans are only supposed to be 2 week loans.

This is the point, though.

I set up Tal Loans today with a 1000% APR. If I lend £1,000,000 over a year, I'm going to be raking it in. To the end user, £30 for £200 doesn't seem too bad over two weeks, but as long as I'm lending, I'm making muchos wongas.

And Johnny Borrower is only paying £30 because he can't use the same mechanisms everyone else uses and pays £10 or less.

They'll survive but their lending criteria will get far stricter.  The £1000% APR allows them to lend to people who are clearly credit risks.

Man in the street won't be happy.

More importantly a lot of the borrowers aren't paying it back after 2 weeks. They still haven't got enough money for essentials (like Sky, cigarettes, £1000 for Christmas presents etc) so the loan either gets rolled over and the interest carries on skyrocketing - or they take out a new loan (which they won't be able to repay) to pay off the first one.

It's a mess that is the governments fault for not sorting it out quicker. Obviously cutting the funding to citizens advice  and many other places that people with money problems seek help from does not help and it means these company's flourish even more.

This kind of loan can kill u if u took it . It's like  Chinese people have their own loan shark . Borrowed £1k and u pay £91 per week for 52 weeks ! I think Wonga us taking a piss here by charging 1000% APR . But one thing is I don't understand , why people still goes to them ? I know sometime u can't avoid it but thinking of paying 1000% interest , u got to think twice before taking the loan. Sure there other alternative in this world beside borrowing at that interest rate .

The majority - because they're stupid

"I know sometime u can't avoid it but thinking of paying 1000% interest "

The key point is APR is an invalid measurement for a 2 week loan, but they are forced to quote it because the FCA requires it. 

It's times like this I wish I was a Muslim. Interest free loans ftw.

Lol

VERY STUPID

FYP

It's hardly a new thing.

This - the difference is that Wonga won't send two guys with baseball bats round your house to collect.

The genuinely desperate and without any other option are a minority.

A case study I read a few months ago to illustrate the Payday loan rip-off was someone who lost their job just before Christmas and was "desperate" because they "needed" £500 for their toddlers Christmas presents.

Some customers might actually need to borrow money to pay for food (for example) but a lot of them are only that desperate at the end of the month because they paid for all their other optional luxuries nearer the beginning of the month.

These could be described as 'desperate' but I think 'stupid' covers it more accurately.

Certainly applies to some.

Certainly does not apply to all.

How are you so sure which element is the minority?

Working with people who work with rent arrears

There's a big overlap of the payday loan market with the rent arrears sector

Genuinely unlucky and unfortunate people are a tiny minority - even given some of the extra people who aren't in the overlapping areas it would still make the overall amount a minority.


EDIT: and more accurately of course, I'm not sure - it's a hypothesis which I have seen evidence to support but not evidence to disprove.

That's an argument to support your case that they have plenty of money?

Depends on your definition of 'plenty'

The gist of it is that a very small minority of tenants in rent arrears have an income below what they need to survive on - they end up in debt because of how they use that income rather than it's absolute value.

I don't have a problem with the APR as it's not really a suitable measure.

Having a quick look the site if I want to lend £200 for 10 days it's going to cost me £26.05.

Seems fair enough for me. I'm being charged for a service. Fine.

But charging the interest for 60 days past the repayment date is a bit of a killer. They currently also have a £20 missed payment fee.

Why not just do £20 missed payment fee + BOE interest rate. That way Wonga still get the initial charge, the late fee, and they're not losing money by holding onto the debt. And to my mind that such help quash a number of the morality questions.

But I'm no expert so that might not work :)

Volunteering in a CAB the majority of debt cases with pay day loan debts are working or in infrequent work and have exhausted other forms of lending. Obviously some of the cases are "stupid" whatever that means, but not so clear cut to say "Why don't they manage their lives better or use cheaper credit"

Seems a good idea to me.

The longer you owe the lower the interest rate is? Hope I don't see you on Dragons Den with that :)

It's a fair point though.

The argument they use is the APR is not appropriate.  So let's make sure it isn't an APR and switch to, say, a normal credit card rate if you are struggling to repay.

There are many other issues with these companies then the apr. the apr is a tax on the desperate/needy/stupid whatever you want to call them. I'd love to discuss the ins and outs of the issues but due to my job I don't think it's a good way to go! The government are not that bothered I would say about the apr.

Well the idea is they claim APR isn't an effective measure and they see it as a "fee" rather than interest. So give the loan and rather than put interest on it charge a "fee". So if someone doesn't pay then charge a penalty. This way they've made money via the initial fee + penalty. The then base rate of interest stops them losing money on it whilst waiting to be repaid.

Question for experian man - if you take out a Wonga loan and pay it back on time, is that seen a positive in the credit score world (loan settled) or a negative (you have used Wonga therefore don't manage your money)?

The reason I ask is whether it is a quick way for a young person to build up a credit history (borrow £100 a few times and pay it back)

Pretty much ruined two years of my life, credit unions helped me, will post when at laptop, the industry is so mortally bankrupt it is unreal, got some horror stories! Was actually offered a sky interview to discuss it, couldn't cause of my job

Yes it'll count as a positive* - but if you have nothing on your credit history you should be able to get credit anyway.

Even a credit card with terrible interest doesn't charge if you pay every month - so spending a few quid on a credit card every month and paying it off in full will put lots of green marks against your credit file.

After that you'd have a good enough credit score to get stuff with lower interest rates without the need to go anyway near a payday loan company

*unless anyone has any alternative information

Comment from twitter in light of discussions on Pay Day Loans and also some on religion in society:

"Wonga and religion are totally different. One preys on desperate and gullible people, manipulating their needs and weaknesses for vast financial gain. And the other is payday loan company."

I think I win the highest interest paid on a loan competition.

Worked out about 260000% I think. Someone please correct me if I'm wrong.

I accidentally went 14p overdrawn once and was charged a £1 daily fee until I spotted it and transferred the 14p from another account.

£365 per year for being 14p overdrawn. That's some interest rate but they get around it by calling it a fee.

The culprit: Halifax

They charge daily fees because it makes things 'simpler' for the customer. Absolute bollocks if you ask me. It's just a massive money spinner for the bank.

Minimum APR on a £2k overdraft is 18% if you're permanently at that limit. The lower your overdraft the higher it gets and unless you pay the whole lot off in one go your interest rate keeps increasing the more you manage to pay off. If you go above £2k it's £2 per day.

Why aren't there any complaints about this fee structure?? Seems much worse than anything wonga do if you ask me.

I hate the big banks far more than pay day loan companies.

There are - a lot, and there's been legislation to get rid of the worst examples. But the banks still find other ways.

I know someone who got charged £25 for going 6p over there overdraft limit - but at least that was a one off fee.

My lloydstsb amount had the same thing but it was £5 a day and capped at 5 days which does seen fair. Surprised Halifax doesn't have a cap tbh.

Natwest once stopped a DD of mine for £25 because I only had £24.90 in my account. They charged me £25 for the bounced DD and then charged me £25 for being 10p overdrawn. I did get them to return the fees after a quick phone call though.

In my opinion its not true. That's how wonga sell it as a benefit, they are bending the truth massively! If you have no credit history get a credit card spend £100 a month on it and pay it off. That will help. Wonga may only be a positive influence if you have a really really really shitty credit rating. Difficult for me to give to much informationt! If you have no credit history do not build up a credit history using wonga etc. just get a store card credit card etc, this will have a positive effect. Cannot really give to much detail for obvious reasons! But happy to give advice to the best of my knowledge on how to get a better score!

Edited a few bits!

This is how I rebuilt my credit rating http://www.vanquis.co.uk/

after a vegas trip I accidently sent money back to a different one of my natwest accounts than I thought I had, I then bounced my phonebill, sky, electricity bill, water bill etc, the following month, and I had pretty high monies in my other Natwest current account, they had charged me £415 in fee's by the time I realised and the only reason I noticed was cos our sky got cut off lol.

They ended up paying me it all back, but it took nearly 3 hours of me shouting at them. Matt did Halifax refund you any of that £365?

I didn't actually pay £365, I only paid about £4 because I noticed after a few days.

I was just illustrating that at a daily charge of £1 it's effectively £365 in annual interest on an overdraft of 6p.

Considering that we use this forum because we a punters or poker players, seems a bit silly to have a go at payday loan companies who offer a service. Let us remember we see bookies getting put into the most deprived areas of the country, but yet people don't flick an eye lid or bother about it when A bookie goes and sponsors a spots team or similar.

They are in my opinion much worse companies than payday loan companies, if they wasn't there who knows how person A or family A was going to be fed? Yes they are around to get money of the desperate, but I think they are really needed by the desperate too.

I can agree with the notion of the thread for, lots of changes do need to be made for these companies, but really is it the minority? Wonga are now advertising numerous times a day on the biggest advertising channel at Prine time, these are £50k spots, numerous times and also sponsor Newcastle. There must be much more than a minority using these, of course not the majority

The proliferation of betting shops has been discussed and criticised on here as well. The advertising of betting sites during football matches is possibly something that should be subject to further regulation. It wasn't that long ago that cigarette manufacturers sponsored sporting events and it was considered normal. Now to many it seems antiquated.

Wonga have a massive market share in an industry that's valued between 2-4 billion a year they are raking it in obviously prime time tv is a popular activity of there customer base! For some people it is a good solution. If you have a shorty credit rating and have an unexpected bill 5 days before payday it may be the best solution for you but in most cases people just roll over their loans every month therefore making these companies a fortune!

http://www.bailii.org/uk/cases/UKHL/1914/1.html

Sandy