just to add: don't worry, I'll just set up an individual voluntary agreement in 6 months time and spend the next 50 years paying a fraction of the money back
[Edited on 1/7/10 by cd.thomson]
I just saw an ad on TV for a loan company that specialises in short-term loans - CashCall, or CashQuick, or similar.
Hidden away in the text at the bottom of the screen it says "typical APR 2278%" - that's right - two thousand, two hundred and
seventy-eight percent per annum, secured against your home.
How can people be so stupid to fall for that! And how is it even regarded as legal and decent?
how else can i book my holiday to benidorm when I've spent all my JSA on fags?
just to add: don't worry, I'll just set up an individual voluntary agreement in 6 months time and spend the next 50 years paying a fraction
of the money back
[Edited on 1/7/10 by cd.thomson]
As always, it's the smallprint that will catch people out; by making it available, if the person wanting the loan hasn't read the specifics,
it's their own fault. That doesn't make it right or even decent though, and unfortunately it's the people already hard-hit that will
apply for these loans, thus pushing themselves further into debt.
I think these organisations should be banned, as it is detremental to anyone applying, and really ios taking advantage of the poorest. Having been a
student for four years and lived in debt, then getting a mortgage, I know times are tough, but I've always tried hard (cough, cough) to live
within my means.
you don't understand what it is like being a single mother with 5 kids by 7 different fathers all under the age of 9 (the kids that is, not the
fathers 
) all screaming out for nintendo, ipads, Wii and flat screen telly, you'd do anything to shut them up.
APR on short term loans with built in admin fees are always high.
its irrelavent on short term loans.
Apples Pears and Rasberries.
if you get £10 out of a chargeable cash machine your charges 20% which is as bad as the 2000 apr.
anyway thats my 2 penny worth.
i worked as a advisor for welcome finance before it went under and although the pricing isnt the best it saved a huge amount of people from losing
there home.
if you needed £20 to get you food till pay day then 2000 apr aint too bad.
with the USA having a massive reccession and thousands losing there home and not eating for 3-4 days with small kids i dont see the issue with a
company offering the small term loans.
im not in finance anymore im a consultant for a IT specialist so im not bias anymore.
If somebody is stupid enough to consider something like that then they deserve the consequences.
IMO
I couldn't believe it the first time I saw the add- had to go on their website to check. Unbelievable!
The people that 'fall' for this kind of offer are unfortunately that sort of people that are already in debt upto their eyeballs... and
beyond.
I do part time work for a car repo company. You would not believe how many people are waaaay too much in debt. Why? Because this society as a whole
makes it so easy to get into debt.
quote:
Originally posted by jossey
APR on short term loans with built in admin fees are always high.
iif you needed £20 to get you food till pay day then 2000 apr aint too bad.
on a similar topic, how do those "cheque cashing" places operate?
It is for peeps who have been given a cheque but either don't have a bank account or else do not want to put the cheque into their account - so
the "cheque cashing" place buy the ceheque off them less some comision and the do what with the cheque? Do they rewrite the payee name so
they can cash it?
2000 odd % PER YEAR doesn't really apply for a short term loan. The way it works is this. You want to borrow £100 for 1 week until you are
paid. They want you to pay back £116 next week to pay off the loan. That is 16% interest but a theoretical APR of 1938%. You don't actually
pay 1938% (unless you're stupid enough not to pay back until a year later) You pay 16%. Remember this is not interest as such but an admin
fee.
10% ANNUAL interest on £100 for a week would be about 18p. 18p is not worth the while of making the loan, so they charge £15 or so for their time
plus a bit for interest.
Why is it worth it? You get an unexpected bill and you look in the bank and you don't have enough to pay it. The penalty for late payment is
£30. You can borrow £100 for a week and pay £16 for the privilege. £16 is cheaper than £30. You get into big trouble if you don't pay these
short term loans back quickly. It is a dangerous game.
quote:
Originally posted by smart51
Why is it worth it? You get an unexpected bill and you look in the bank and you don't have enough to pay it. The penalty for late payment is £30. You can borrow £100 for a week and pay £16 for the privilege. £16 is cheaper than £30. You get into big trouble if you don't pay these short term loans back quickly. It is a dangerous game.
quote:
Originally posted by daviep
How can you have an unexpected bill?
quote:
Originally posted by daviep
How can you have an unexpected bill?
quote:
Originally posted by daviep
save some money for emergency/disasters then you won't need to worry.
I must admit that I'm biased - my dad brought me and my brother up with the philosophy that wanting something is fine - if you can pay for it.
If you can't afford it, save for it. If you can't afford to save for it - you don't need it.
Unless you're extremely fortunate you can't go through life without borrowing, but it's stupid to take out a loan that you can't
afford, or would place you in financial risk (especially risking your home).
quote:
Originally posted by daviep
This is a good example of credit getting people in to trouble.
How can you have an unexpected bill?
If you pay for things up front, and this is going to sound really radical to a large percentage of the population, save some money for emergency/disasters then you won't need to worry.
IMO
I took a pic of my tv when I saw this a few months back, mainly to read it back and make sure my eyes weren't playing tricks on me
I had chronic debt when I started contracting. I had enough money to last at least 3 months normal costs. I worked for a company that agreed my hourly
rate and expenses for me to stay in a hotel (for 3 months at cost +15%admin fee). They were supposed to pay monthly in arrears, so I invoice at the
end of the first month, expecting to be paid by the end of the second month. Obviously the normal bill + staying away from home soon add up. At the
end of 4 months when the work was all done, they still hadn't paid. It was 3 months after that when I saw the first money. So it is very easy to
get into bad debt (The hotel bill was over 5 grand because I had all my meals there - until they didnt pay the first bill), even when you think you
have everything under control. The bank charges were horrendeous and even though I had up till then had a good credit rating that was wiped out. This
was with a huge multinational company that measures its profits in billions.
Hugh
quote:
Originally posted by Stott
I took a pic of my tv when I saw this a few months back, mainly to read it back and make sure my eyes weren't playing tricks on me
quote:
Originally posted by hughpinder
I had chronic debt when I started contracting. I had enough money to last at least 3 months normal costs. I worked for a company that agreed my hourly rate and expenses for me to stay in a hotel (for 3 months at cost +15%admin fee). They were supposed to pay monthly in arrears, so I invoice at the end of the first month, expecting to be paid by the end of the second month. Obviously the normal bill + staying away from home soon add up. At the end of 4 months when the work was all done, they still hadn't paid. It was 3 months after that when I saw the first money. So it is very easy to get into bad debt (The hotel bill was over 5 grand because I had all my meals there - until they didnt pay the first bill), even when you think you have everything under control. The bank charges were horrendeous and even though I had up till then had a good credit rating that was wiped out. This was with a huge multinational company that measures its profits in billions.
Hugh
I did this for a living a few years back and you would be amazed at the type of person that would use the service.
All walks of life from teachers to nurses and beyond.
The real killer and the money maker was the renewal as if you didn’t have the cash this month then you wouldn’t next month either.
The firm would get an income every month for 3 minuets work. That’s until the customer goes under and the bank with draws the cheque guarantee
card.
Some lasted years earning the firm lots.
I could tell you some stories 
As said its some one on the edge that has waxed every other type of credit.
my friend borrowed 10k from a loan shark, repaid 18k and still owed the 10k he started with. It was £500 a month in interest. He's had to duck him now and is in hiding.
Got stung with a store card when I had a saturday job 1 leather jacket took me years to pay back.
Many years later I was given a free overdraft equal to 2 months wages, took me years to pay back.
I think I have learnt my lesson only time will tell
Nothing wrong with it they display the interest rate clearly. You make damn sure you pay it back though!
I do wonder if in a few years we'll hear of people that forgot to pay it back, and the loan company didn't bother to say anything for about
10 months then send a letter saying they owe £1800 from a £100 loan
Not a wise thing to do BUT have you accidently gone overdrawn on your current account recently?...... I'll bet if you add up all the charges etc
etc for going £5 overdrawn for a week it's easily equivalent to 2000 odd percent interest........
quote:
Originally posted by Ninehigh
Nothing wrong with it they display the interest rate clearly. You make damn sure you pay it back though!
I do wonder if in a few years we'll hear of people that forgot to pay it back, and the loan company didn't bother to say anything for about 10 months then send a letter saying they owe £1800 from a £100 loan
quote:
Originally posted by 02GF74
quote:
Originally posted by daviep
How can you have an unexpected bill?
For example have a tyre pop due to a pothole that had appeared overnight.
There's running costs and unexpected maintenance, for example:
The tread on my tyres are running low, that's running costs.
The tread on my tyres have shredded off, that's unexpected
i have just spent all night thinking about problems....
our oldest son came to us last night and said that he owed £25k from gambling (all to banks thank god). he is 20 years old ond earns 15K pa.
off to the bank and the citizens advice with him today to discuss bankrupcy for him. i am so so tired.
ditch
First of all is the debt unsecured?, if it is you do not go bankrupt for unsecured debt unless you let it happen by bad advice or by ignoring it.
Bankruptcy has long term consequences for his potential future career choices.
As it's over 15K and he is in work he could look at an IVA, make sure any interest is stopped. Good points about an IVA is a good chunk of the
debt will be written off, debt free in I think 5 years, doesn't affect potential career choices, prevents the banks from hasseling you night and
day by law. The basic problem I have with this, is if he has any assets usually a bit of equity in a house you are turning any unsecured debt into
debt secured against the house and if he dosen't pay at any time during the 5 years ie losing his job then he could lose his home and often they
want the equity in the house aswell.
Another option write to the creditors outline his income and expenditure be realistic, whatevers left split it pro rata according to how much is owed
to each bank. If they don't agree let them take him to court turn up and do the same thing present a realistic budget and the judge will split
what's left even if it's a token jesture of a pound a mouth
This is basic stuff it can get very messy and differcult especially when third parties get involved for instance companies who purchase the debt form
the banks but whatever happens don't ignore it, keep detailed records of any contact by phone, all letters, if any offers are made by phone ie if
you pay us a grand we will take that in full and final settlement of your debt, make sure you have that in writing always
Good luck
David
quote:
Originally posted by ditchlewis
i have just spent all night thinking about problems....
our oldest son came to us last night and said that he owed £25k from gambling (all to banks thank god). he is 20 years old ond earns 15K pa.
off to the bank and the citizens advice with him today to discuss bankrupcy for him. i am so so tired.
ditch
Many thanks david.
we went to the bank and they said that they could consolidate the loans and over draft into one loan but it would be unlikely to be approved...
don't they want their money back he really wants to pay it back.
we pointed out their silly loans policy of lending £17k to a 20 year old who earns £15K and they agreed that this is a matter for the onbudsman.
All the loans are unsuecured and the citizens advice have booked him into one of their financial advisors in 3 weeks time to commence either IVA or
bancrupcy proceedings what ever is best for him.
he has no assets and the woman we saw was very scathing about what has happened to him and the fault of the banks.
We are making him go to gamblers annonimous. He lives with us in a granny flat on the side of the house so he wont be homeless.
may be i will get some sleep tonight.
ditch
Actually that's a good point there are responsible lending rules... No sod will lend me 17K, even so I can do my job. Heck I was refused 10k credit so I could get a car of my own to taxi in