I see Marc Allen has an inflammatory link on payday loans. From my point of view payday loans are just bridging finance in an accessible package - and bridging finance is only ever intended FOR SHORT PERIODS measured in days. Take a 4000% APR on a sum of £500 for one week - thats not going to be a massive payment (think how much they cost to administrate the scheme). Make it two weeks or three and then you have a real problem - but if you use a payday loan for anything more than days then you are slightly mad IMHO, or desperate. And thats the problem. They prey on the desperate who would get refused a conventional loan. The APR figures are dramatic because by the credit card act they *have* to show a representative figure over a year. I honestly think there are many people who enter into financial arrangements with little understanding of the implications of what they are signing - and I do think the vendors need to show more representative examples and explain better. I have had to use bridging finance just the once - when I was buying a house and needed to get some work done urgently to be able to get a mortgage. It was for a few weeks and it annoyed me. But then if I didnt I would never have got a mortgage and it was paid back as soon as it hit my account - payday/bridging loans *do* have a purpose, but only when used in the right fashion!
Posted on: Wed, 09 Jul 2014 09:00:34 +0000
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