Now That's What I Call APR!

  babybell 16:57 06 May 10
Locked

Home from work this afternoon so I've managed to catch some of the wonderful loan adverts they stick on TV.

A new craze seems to be developing in terms on lending people money. Now, you type how much you want, they tell you how much you pay back in so many days time and they transfer the money almost instantly. It seems to be based around lending a short amount over a short period of time, as they take the money back out of your account on an agreed date.

The interesting factor for more, was the APR quoted at the end of the advert.....

....Typical 2356% APR!

Thats some percentage!

  birdface 17:08 06 May 10

Noticed that myself I can only think that it should have been 23.56% but even that looked odd.
Just wondered if someone got a loan with those interest charges could they make them pay as it was Advertised at 2356%

  BT 17:26 06 May 10

That's correct

Just think about it - in the AD..

Borrow £70
For 5 Days
Pay something over £9 for the privilege
That's early £2 a DAY or nearly 13% of the amount borrowed.
Compounded up over a year, it would soon reach an astronomical amount.

  Tim1964 17:35 06 May 10

Loan sharking for the 21st century

:D

  Pineman100 17:35 06 May 10

It always seems to be the case that the least well-off in our society pay the most exorbitant rates of interest.

And let's face it, those who need to borrow a few tens of pounds for a short time are likely to be our most hard-up brethren.

I suppose the lender has to factor in the increased risk of default, but it does seem hard.

  babybell 17:35 06 May 10

It is correct, incredibly.

This loan company has a staggering 2689% (Shown on the left hand side)

But, they do explain it to us simpletons using a non-patronising cartoon:

click here

  babybell 17:37 06 May 10

click here

Typical APR shown on the homepage.

  Al94 17:46 06 May 10

All short term loans with arrangement fees have staggeringly high APR's. Nothing new in that.

  Legolas 14:53 07 May 10

I was in the money shop in Glasgow a few days ago, while waiting I looked over a leaflet advertising payday loans at 260.2% APR and I thought that was bad, 2356% APR is ludicrous

  ronalddonald 16:11 07 May 10

babybell ive seen these high apr adverts for about a year now and it even been in the news.

  ronalddonald 16:12 07 May 10

yet the apr is very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very very HIGH!!!

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