Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
#1
Britain's permissive laws on unlimited interest rates on borrowed money have caused many people to repay a loan with a pound of flesh.
The numbers are increasing by the day, as our economy is strangled by Austerity.
Sky News reports:
"Over a million people are resorting to high-interest so-called 'pay day' loans to make ends meet."
While the Chancellor promises us that we shall suffer even more for years to come, as he dismally fails his Government's borrowing targets and the annual deficit remains as it was under Labour, ever more people in Britain are falling to debt-slavery:
"Nearly eight million people in Britain are struggling to keep up with mortgage or rent payments each month, according to the charity Shelter.
A total of 1.4 million have already fallen behind, with almost a million people resorting to high-interest so-called 'pay day' loans to make ends meet."
For the full article:
http://news.sky.com/story/1033099/mortgages-millions-struggle-with-paymentsBrian Dixon
- Location: Dover
- Registered: 23 Sep 2008
- Posts: 23,940
#2
old story there alex,if the mugs who taken out the loans,but dont read the small print,thats there tough luck.
Guest 653- Registered: 13 Mar 2008
- Posts: 10,540
#3
It's not a case of "mugs" Brian, but people who genuinely don't appreiate what an APR of over 2,000, 3,000 and sometimes over 4,000 % means. They are supposed to be short-term loans, but many times end up being for months and that is where the rates soar.
People need to be much more sensible with their money and not use these High Street robbers.
Roger
Keith Sansum1
- Location: london
- Registered: 25 Aug 2010
- Posts: 23,948
#4
nothing new alexander
its legal robbery
some APR over 7000
ALL POSTS ARE MY OWN PERSONAL VIEWS
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#5
Appalling APRs - ill-advised for anyone to take such loans, BUT. We are talking about relatively small amounts with the object of a short loan period, perhaps days rather than weeks. When you take a nominally small cash fee it can translate into a very high APR if not used in the manner intended. The problem here, of course, is that a minimum fee is needed to cover the processing costs. It simply shows that low, short term borrowing is not commercially viable for a lender with what would look like a reasonable APR while for the borrower such a loan that has a fee that covers the processing costs is also not a viable option if done on a regular basis or extends outside the intended term.
In short - just stay away from them and learn to budget without having to get into a mess with these.
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
#6
there will always be some that cannot live within their means not just those on the lowest income either.
Brian Dixon- Location: Dover
- Registered: 23 Sep 2008
- Posts: 23,940
#7
roger,as i said mugs and thats putting it mildly.agreed people dont think before aplying.
Keith Sansum1- Location: london
- Registered: 25 Aug 2010
- Posts: 23,948
#8
howard
for some its desperation
ALL POSTS ARE MY OWN PERSONAL VIEWS
Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
#9
Many, if not most, people who get a loan, have to have an income through employment, as well as a guarantor who has an income through employment.
So my point is, and this is probably the point in the article, so many who are paying rent or mortgage are paying far too much, and consequently can't meet the costs with their income.
As a result, when they can't get a bank loan, which may be because they already have a mortgage or a bank loan, or a bad credit history, they revert out of desperation to loan sharks.
What they pay on interest is a sheer disgrace to Society.
I strongly doubt they are simply over spending their budget. For example people with children: they know full well what they can afford and what not. So if you have to buy, for example, school clothes for a growing child to replace the clothes that no longer fit, and a new pair of shoes, can one just simply apply the advice: learn to budget?
The other point in the article is: the tendency to poverty and debt-slavery is growing.
So Simple-Simon explanations are simply of no value here! The economists have failed, the capitalist system has failed, and speculative house and rent prices, coupled with strangling interest rates on loans, are spiraling the Country into poverty.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#10
Alexander - as always you do talk nonsense. People are and should be responsible for themselves and budgeting their income. No-one says it is easy. I have been through periods in my early days when things were difficult, not necessarily that long ago either. Choices have to be made when you are in that situation and some people make bad choices and that is up to them, you cannot save people from themselves. Look at people around town - some, clearly on benefits, using their mobile phone, smoking and drinking in the pub. Before questioning the system, question the lifestyle choices of people and their priorities.
Ross Miller
- Location: London Road, Dover
- Registered: 17 Sep 2008
- Posts: 3,709
#11
Some observations:
microfinance works
http://en.wikipedia.org/wiki/Microfinance also the introduction to this site is of interest
http://www.kiva.org/about/microfinance
A very interesting academic article on the social costs of deindustrialisation
http://www.americanmanufacturing.org/wordpress/wp-content/uploads/2009/06/chapter5russo.pdf
To dress this up solely as individual responsibility is naive, condescending and over simplistic, but is an easy way of government and corporations of absolving themselves for their responsibility for the consequence of their choices.
"Dream as if you'll live forever. Live as if you'll die today." - James Dean
"Being deeply loved by someone gives you strength,
While loving someone deeply gives you courage" - Laozi
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#12
Ross - it is personal choice. The problem arises when you make excuses for them as it encourages irresponsible lifestyle choices.
Guest 698- Registered: 28 May 2010
- Posts: 8,664
#13
Ross, microfinance is usually aimed at small entrepreneurs to buy fixed assets or equip premises for their commercial enterprise, not at struggling wage-earners.
Interesting article; but I would ask whether one's social conscience in such things ought to be parochial, nationalistic or Global? Is a worker in Austin Tx to be valued more highly than one in Guangzhao or Jogjakarta?
I suspect payday loan companies may be the next target of mis-selling allegations.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Ross Miller- Location: London Road, Dover
- Registered: 17 Sep 2008
- Posts: 3,709
#14
Barry I suppose there is no such thing as society eh?
Peter one has to start somewhere and conscience, along with charity must start at home in ones own community, then country, then region etc. If I am not ok, and my community is not ok how can I help others?
Microfinance has often been aimed at small enterprise, but not exclusively; there is a long tradition of credit unions in the UK that offer a similar facility; albeit require a minimum level of saving before one is eligible for a loan and have statutorily capped interest rates.
"Dream as if you'll live forever. Live as if you'll die today." - James Dean
"Being deeply loved by someone gives you strength,
While loving someone deeply gives you courage" - Laozi
Guest 698- Registered: 28 May 2010
- Posts: 8,664
#15
Interesting that mutual institutions like credit unions and the Asian Gramen banks originated solely in the private sector, without (and in many cases, despite) government interference.
Mutualism is the key to fairness, in many cases.
Barry, the people who get screwed by the payday lenders are generally not the best educated in society. Our education system sends millions of people out into the world ill-equipped for the complexities of daily life. There has to be a balance.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#16
Peter - I am no defender of these dreadful payday loan companies. I have merely provided some explanation of why the fees translate into such high APRs.
Ross - I really do not see how a misquotion of Mrs T has any relevance. The fact is we are individuals and make our individual choices and that is how it should be. Sometimes good choices, sometimes bad choices but good or bad we should never stop people from having to make those choices. Having made them, good or bad, we then live with the consequences and take the responsibility for them.
Some people will choose designer labels before healthy food and then run to a payday loan company to see them through. They are wrong, they made the wrong choice, their decision. Do you help them by excusing them by being sympathetic, blaming the loan company and saying 'its societies fault' or by telling them not to be so damn stupid, to make better choices and to get their act together. Too much of the former excuses and reinforces bad choices, more of the latter might mean they mend their ways.
Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
#17
Barry, I got to the phrase: "as always you do talk nonsense".... and didn't bother reading any further....
Guest 698- Registered: 28 May 2010
- Posts: 8,664
#18
When I have the time I might go and apply for a payday loan and see what the procedures are. Before condemning either the lenders or the borrowers, we need more information.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
#19
Peter, I sincerely hope that when you do apply for a payday loan, you are not doing so because you really need it.
Because if you were needing the money so desperately, only then could your view on payday loans be considered of any value
Obviously I don't wish you this situation
In fact, my views on shark loans are based on what I read of them from those who have got sucked into debt-slavery.
Guest 698- Registered: 28 May 2010
- Posts: 8,664
#20
Purely a research project, Alex. To see what the selling process is. Is it fair? Do they press you to borrow more than you need? Do they follow Consumer Credit Act procedures to the letter?
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson