“I was thinking about payday loans after reading this; an article about Bolton announcing quickquid as their new sponsor, which has angered many fans
I wouldnt want to be sponsored by quickquid, but not because of their business “ethics” but mainly because its a stupid name with a stupid logo and not a cool thing to have on a shirt and have to walk around in.
Im just wondering what people think of these companies QuickQuick, Wonga.com, PayDayUk etc, apart from the stupid names, I was wondering what everyone else thinks of them.
Most people hate them and think of them as “disgusting” and “exploit vulnerable people”
I personally find their way of business perfectly fine. If someone wants a loan with 3000% APR then thats their choice, and if they are too stupid to understand how loans work then they shouldn’t be getting loans in the first place or (sorry if this sounds harsh) they deserve it. They make it clear that you have to pay it all back plus interest its not some sort of scam where they are pretending to be a charity. ”
This question on the Aston Villa Forum posted earlier today sparked an interesting discussion. Among the usual, misinformed ‘monstrous APR’ comments (see our articles on why APR is irrelevant, or at least why absolute APR is irrelevant – only relative APR is relevant when payday loans are compared to other comparable products) there were a few well informed comments, some for payday loan and some against.
Where the comments were against payday loans the aspects they found most troubling were the ease with which customers can take out payday loans, and the ease with which they can be rolled over, which of course is when users can get into trouble.
On the whole we have to agree with these comments, payday loans are easy to take out, that’s one of their main selling factors, so customers to have to take responsibility for taking the loans out. Customers should have an honest conversation with themselves about the realist likelihood of being able to pay the loans back. Payday loans make no bones about being an expensive way of borrowing money, you pay a premium for the convenience and speed, if there is any question about being able to pay the money back customers should probably look for alternative sources of funding. If there are no other sources of funding borrowers should make sure they have a) enough money coming in to pay the loan back b) a back up plan if that money does not come in for any reason. So making the loans harder to obtain probably isn’t a useful solution, however better education probably is. Realistically there is no short term solution for the materialistic society we live in, for 3 generations now we have lived with being able to get things immediately, with cheap credit and instant gratification; however if you want to stop people taking credit inappropriately then you need a change in that attitude much more than you need to try and slowly legislate against different lending practices as they appear.
One of the most sensible suggestions we have seen regarding legislation to control payday loans is limiting the number of times a loan can be rolled over. This would seem to make much more sense than capping interest rates, which would have very little effect on anything – certainly very little from a consumers point of view. However limiting the number of times a loan can be rolled over would have a significant effect on people taking out a loan. Payday loans are intended as a short term solution, lenders go to great lengths to stress payday loans are not intended as a long term solution, however if someone takes out a loan in good faith intending to pay the loan back at the end of the month and then loses their job or suffers some other major set back which means they cannot pay it back at the designated date then it doesn’t seem fair to keep charging them the full fee each month, they are not paying for the convenience or speed of lending each month so why pay the full premium? Once a borrower can be seen to be in trouble, say 3 or 4 months of rolling over they should be able to move to a repayment schedule which sees them only paying back the principle sum borrowed and not having to pay any more interest.