Quote:
Originally Posted by Neil
It's ok quoting figures of 1500% and saying it's wrong but you have to look into deeper than that. That figure is quoted as a per annum figure but the loans are often only for a week or two.
I just went to the Wonga site and picked a loan of £100 for 7 days. It says I have to pay back £112.89. If I want the £100 to pay off a bill and I get paid in 7 days it could be a good deal. What does your bank charge for a missed direct debit or the company you owe it to? If it is more than £12.89 then you have saved money.
The interest on that loan is 365%pa with a fee of £5.50. Yes the apr is high but so is the risk to the company but that loan could save you money.
I am not saying these companies are good or bad just that sometimes they can help you out of a hole or if you abuse them can get you in a hole.
The big problem with credit is that there is no national register showing how much credit individuals owe and to which company. Having one would be a massive breech of privacy I suppose but it would also let loan companies instantly see if you had loans already and if they should accept you or not.
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I agree, they wasn't set up for a long term loan and they 'may' help some folk out.
In a ideal world if they did their job correctly with the vetting of the application the ads they plaster all over TV and shop windows would reel in less desperate fish and less would slip through the net.
As in most cases the % interest is regularly in the small print at the bottom, with the main advert being how the loan can help you with this or that.
Come to think of it, I don't think the voice on tv ads ever mentions the sky high payback risks, hmmm
Its a con and sadly there are folk struggling for cash that get reeled in high risk or not and that's just wrong (in my opinion).
Don't forget, for some folk, it takes a little debt to teach them what to look out for, especially when their young and still wet behind the ears.
Margaret hit the nail on the head, we should (strictly) teach our youngsters about (bad) money management.