Borrowing from a loan company.....am I understanding this properly?
- Thread starter Dave7
- Start date
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Cycleops
Legendary Member
- Location
- Accra, Ghana
Unless it's secured against something it's a high risk loan for the lender.
IanSmithCSE
Guru
- Location
- Worcester, Worcestershire
Good morning,
They ended up going broke as so many of the loans weren't repaid and the FCA/FSA whatever it was called then, ended up deeming many of the loans as being made without proper affordabilty checks having been made.
This meant that although the initial loan amount still had to be repaid the interest payments that would have covered the defaults didn't.
You do need to be careful though when looking at APRs as the interest is usually applyed monthly so the money amount of the interest reduces as the loan gets paid off. Also a lot, but not all, of very high APRs are attached to very low actual loans amounts, say £50.
I suspect that we are seeing good intentions badly implemented, Provident the high interest door step lender was regulated out of the business of lending to those who desparatly needed loans, they are now called Vanquish and lend to people with good credit score.
This has left the market open for those offering even worse terms, who are not PLCs and will simply shut down and reopen if needed.
Bye
Ian
Do you remember Amigo loans from a few years ago, they were all over the tv at 49%.
They ended up going broke as so many of the loans weren't repaid and the FCA/FSA whatever it was called then, ended up deeming many of the loans as being made without proper affordabilty checks having been made.
This meant that although the initial loan amount still had to be repaid the interest payments that would have covered the defaults didn't.
You do need to be careful though when looking at APRs as the interest is usually applyed monthly so the money amount of the interest reduces as the loan gets paid off. Also a lot, but not all, of very high APRs are attached to very low actual loans amounts, say £50.
I suspect that we are seeing good intentions badly implemented, Provident the high interest door step lender was regulated out of the business of lending to those who desparatly needed loans, they are now called Vanquish and lend to people with good credit score.
This has left the market open for those offering even worse terms, who are not PLCs and will simply shut down and reopen if needed.
Bye
Ian
Last edited:
Ming the Merciless
There is no mercy
- Location
- Inside my skull
If you took out a loan of £20k and didn’t pay anything back for a year, then pretty much yes. But you’re paying back, say monthly, and thus reducing the loan amount, and thus interest payments as each month goes by.
If you borrowed that over 5 years, monthly payments, you’re looking at close to £100k. You can see why people already in trouble, sink in desperation, should they take on such terms.
Or worse the "nice friendly" money lender i've seen the tactics they use.
KnittyNorah
Über Member
- Location
- The Frozen North (of England)
I once rented a house which was subject to regular 'visits' - due to the previous tenant's 'activities' - from bailiffs, debt collectors and the like.
I had the house at a vastly reduced rent for a period, because of this.
It really was very unpleasant indeed at times - although I became perfectly friendly with the crown court bailiffs, who were decent blokes doing a legal job of work, the less-reputable of the debt collectors were often plain *nasty*.
I had good neighbours and an excellent landlord (a friend of a friend) and am not easily intimidated but for anyone less confident, the debt collectors would've been very frightening, they didn't care one iota that the debts they were chasing were nothing to do with me.
ebikeerwidnes
Guru
- Location
- Z’ha’dum
Remember Wonga?
Interest rates when that started were WAY higher
the government - can;t remember which one - LIMITED it so that you could not charge more then 100%
which is damn scary for a legal loan concept
and only someone who is desperate or who does not really understand numbers and money is going to look at
which is why they are probably in this situation in the first place
which suggests that this is a way of exploiting the vulnerable
Still - better than that nice man in the pub who will lend you a few hundred - no paperwork - but will break your legs if you don;t pay up (in some currently undefined manner) when he says you agreed to
Interest rates when that started were WAY higher
the government - can;t remember which one - LIMITED it so that you could not charge more then 100%
which is damn scary for a legal loan concept
and only someone who is desperate or who does not really understand numbers and money is going to look at
which is why they are probably in this situation in the first place
which suggests that this is a way of exploiting the vulnerable
Still - better than that nice man in the pub who will lend you a few hundred - no paperwork - but will break your legs if you don;t pay up (in some currently undefined manner) when he says you agreed to
IanSmithCSE
Guru
- Location
- Worcester, Worcestershire
Good evening,
I am contemplating changing my one and only credit card because the provider has delusions of grandeur and I found this;
Youch, I am so desparate to appear succesful!
£575 annual fee!
Wonga originally filled a need, like Provident, it is very easy to be smug when you are on a good income, Provident was effectively outlawed, it became Vanquish, so did all of Provident's customers suddenly get a £10k salary rise?
Of course not, they now borrow from someone totally unregulated and as the lender is unregulated there won't be any official stats.
Bye
Ian
I am contemplating changing my one and only credit card because the provider has delusions of grandeur and I found this;
Youch, I am so desparate to appear succesful!
£575 annual fee!
Wonga originally filled a need, like Provident, it is very easy to be smug when you are on a good income, Provident was effectively outlawed, it became Vanquish, so did all of Provident's customers suddenly get a £10k salary rise?
Of course not, they now borrow from someone totally unregulated and as the lender is unregulated there won't be any official stats.
Bye
Ian
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Chris S
Legendary Member
- Location
- Birmingham
I am surprised that American Express do any business in the UK. A lot of retailers won't accept them here and most UK credit cards don't charge fees.
ebikeerwidnes
Guru
- Location
- Z’ha’dum
As far as I can see they are only used as company credit cards - and I suppose they makes sense for that as they can be used at so few places. hence people "accidentally" using them for personal stuff is less likely.
Although what use they are as a company card is something I do not know!
toffee
Guru
Used them.in my last place instead of fuel cards. All the supermarket fuel station take them, also alot of on line shops aswell as Amazon
IanSmithCSE
Guru
- Location
- Worcester, Worcestershire
Good evening,
In the past AmEx certainly had acceptance issues, but nowadays many card processing providers
https://www.zettle.com/gb/help/articles/1084715-accepted-payment-methods
accept it at the same rate as Visa or Mastercard, maybe there are so few transactions that they are willing to swallow the cost.
Bye
Ian
In the past AmEx certainly had acceptance issues, but nowadays many card processing providers
https://www.zettle.com/gb/help/articles/1084715-accepted-payment-methods
accept it at the same rate as Visa or Mastercard, maybe there are so few transactions that they are willing to swallow the cost.
Bye
Ian
AMEX is now accepted pretty much everywhere. We get 1.25% cash back so use is when/where we can? The AMEX point are also very good if you fly.
The APR% is pretty irrelevant as I suspect most user set up direct debits that clear the account every month automatically, so in effect you get cash back/point on spending you would have done any ways.
