Yes you're right, except that most people who end up with a pay day loan are unable to pay it off in the "short term" which is why they end up paying the massive APRs interests.
Except your statement doesn't reflect the facts.
A quarter of Wongas loans are paid off early - resulting in a lower charge.
Yes you're right, except that most people who end up with a pay day loan are unable to pay it off in the "short term" which is why they end up paying the massive APRs interests.
Indeed. So what would be different if they were getting a 'payday' style loan from the bank instead?
Indeed. So what would be different if they were getting a 'payday' style loan from the bank instead?
The interest rates are hugely different and banks don't have "payday" style loans last time I looked. The minimum length of time you can borrow from most banks is usually six months.
A cynical ploy to get their hooks into the poor and vulnerable.
Jesus would be proud.
Hmm.. I'd probably disagree with you there. Whatever our disagreements about the basis for some aspects of religious faith, a lot of decent people are religious and a great many of them go out of their way to do good things for others. I see this new venture in that light.
But I am struggling to take any comfort from that chink of light when the business model of the Pay Day Industry is that the big profits come when the lender slips - or is nudged - into " A Loan to Pay Off a Loan".
credit unions have been around a long time and as far as I can see, the CoE is planning to support the ones that exist by offering free premises and support in kind e.g. access to professional legal and financial advice
I think it's a good idea but I honestly think unless they can afford to plough the same level of advertising into it as the likes of Wonga (which they won't be able to) then I can't see them making much of an impact
But I am struggling to take any comfort from that chink of light when the business model of the Pay Day Industry is that the big profits come when the lender slips - or is nudged - into " A Loan to Pay Off a Loan".
The interest rates are hugely different and banks don't have "payday" style loans last time I looked. The minimum length of time you can borrow from most banks is usually six months.
The post I was responding to initially was saying that banks should takeover the payday loans companies.
Hmm.. I'd probably disagree with you there. Whatever our disagreements about the basis for some aspects of religious faith, a lot of decent people are religious and a great many of them go out of their way to do good things for others. I see this new venture in that light.
The interest rates are hugely different and banks don't have "payday" style loans last time I looked. The minimum length of time you can borrow from most banks is usually six months.
Banks do offer short-term lending facilities. They are called overdrafts and credit cards. Overdrafts can be expensive but use a credit card properly and it won't cost you a penny in interest.
The problem is that the people who use these payday loans are those who cannot get a credit card.
The post I was responding to initially was saying that banks should takeover the payday loans companies.
And your point about understanding interest rates was fair.
But I still think the government should have handed out licences to the major banks only. No matter how much I may have attacked them over Libor and the rest, I do not believe their motivation, in a stand-alone high street operation, would be to turn poor people into desperate people ( that being where the maximum profit lies)
That is the reality of what we have now.
And once again - I am talking about the Pay-day loan industry, not one particular company.
This is a noble sentiment, but it's fatally flawed.
The payday loans companies are a huge, multi-£bn industry.
The Church is proposing to out-compete them. Surely this will inevitably mean that they, one of the main opponents of the debt culture we see around us, will become one of the country's biggest lenders?
The post I was responding to initially was saying that banks should takeover the payday loans companies.
Yes, they also said the interest rates would be far smaller if the banks were operating pay day loans and you said would they because the payday loans rates weren't actually as large as they appeared because they were yearly rates.
My reply to you was that most people don't pay off their payday loans straight away and, therefore, do end up paying off huge interest on their loans unlike those from a bank.
Banks do offer short-term lending facilities. They are called overdrafts and credit cards. Overdrafts can be expensive but use a credit card properly and it won't cost you a penny in interest.
The problem is that the people who use these payday loans are those who cannot get a credit card.
Yes you are right they do offer short term lending facilities, however I was talking about loan time periods not credit cards and overdrafts. In addition, the interest rates on credit cards and overdrafts are still not comparable to those offered on pay day loans.
Comments
Except your statement doesn't reflect the facts.
A quarter of Wongas loans are paid off early - resulting in a lower charge.
91% of loans are paid on time.
A tiny 1.2% are 3 months or more overdue.
http://www.openwonga.com/
Indeed. So what would be different if they were getting a 'payday' style loan from the bank instead?
The interest rates are hugely different and banks don't have "payday" style loans last time I looked. The minimum length of time you can borrow from most banks is usually six months.
Yes, that's Wonga, they're not the only pay day loan company out there.
Hmm.. I'd probably disagree with you there. Whatever our disagreements about the basis for some aspects of religious faith, a lot of decent people are religious and a great many of them go out of their way to do good things for others. I see this new venture in that light.
If you are telling us that Wonga are not the worst offenders out of the whole bunch I think you are probably correct.
http://www.choose.net/money/guide/news/wonga-different-compare-payday.html
But I am struggling to take any comfort from that chink of light when the business model of the Pay Day Industry is that the big profits come when the lender slips - or is nudged - into " A Loan to Pay Off a Loan".
this is how they work
http://www.bbc.co.uk/news/business-23448990
I think it's a good idea but I honestly think unless they can afford to plough the same level of advertising into it as the likes of Wonga (which they won't be able to) then I can't see them making much of an impact
Exactly so Landis.
The post I was responding to initially was saying that banks should takeover the payday loans companies.
There are dozens of "payday" lenders in the market so I don't know why they get all of the stick. Maybe it's due to the success of their marketing.
Besides, is being in debt to Wonga any worse than selling your soul to the CoE?
Completely agree.
Banks do offer short-term lending facilities. They are called overdrafts and credit cards. Overdrafts can be expensive but use a credit card properly and it won't cost you a penny in interest.
The problem is that the people who use these payday loans are those who cannot get a credit card.
And your point about understanding interest rates was fair.
But I still think the government should have handed out licences to the major banks only. No matter how much I may have attacked them over Libor and the rest, I do not believe their motivation, in a stand-alone high street operation, would be to turn poor people into desperate people ( that being where the maximum profit lies)
That is the reality of what we have now.
And once again - I am talking about the Pay-day loan industry, not one particular company.
The payday loans companies are a huge, multi-£bn industry.
The Church is proposing to out-compete them. Surely this will inevitably mean that they, one of the main opponents of the debt culture we see around us, will become one of the country's biggest lenders?
And they have no moral issues with this?
I'd be more interested if they were offering a service of turning water into wine.
You know, I've never seen anyone capitulate with a strawman quite so readily. You could have at least had a proper go first.
Yes, they also said the interest rates would be far smaller if the banks were operating pay day loans and you said would they because the payday loans rates weren't actually as large as they appeared because they were yearly rates.
My reply to you was that most people don't pay off their payday loans straight away and, therefore, do end up paying off huge interest on their loans unlike those from a bank.
Yes you are right they do offer short term lending facilities, however I was talking about loan time periods not credit cards and overdrafts. In addition, the interest rates on credit cards and overdrafts are still not comparable to those offered on pay day loans.
A. One is part of a morally bankrupt, blood-sucking multi-£bn industry... and the other provide loans! BOOM! BOOM!
Gerroorfmoithread... :mad:
I agree - Payday loan companies should be illegal and not allowed to advertise ANYWHERE.