pwhittle

I saw an ad in a cheque-cashing type place advertising lons, showing happy smiley people with nice cars. The small print said 177% APR.
I though that was pretty bad, but I was just talking to someone from the local credit union. They'd research lending options across town.

guess what the worst so far is.

Go on...


64000% ? no, they found one to beat that



2.6 million%.

That's 2.6 million % APR. No joke.

and the credit union will lend to virtually anyone for less than 20%.

No doubt the ***** that lend it out can justify it to themselves.
Before someone inevitably says people should read the small print, yes, that's obvious to us, who can read. Some people just get desparate.

davegtt

That cant be right, arnt interest rates governed from this sort of thing? Im sure Ive read this before a couple of years back.

TopBanana

1.21 jiggawatts?!!!

Great Scott!

PeteBrant

I think "desperate" is the wrong word for someone that would take out a loan at 2.6 Million % APR - I think you need to go more towards "Mind numbingly thick"

Besides, I seriously doubt there exists a loan @ 2.6million % APR - I mean borrow a tenner and after a month you will owe £21,666

pwhittle

doubt it all you like, it's there if you read their tiny print. Obviously they hope that you won't.
Many people (young people espeically, as recently reported by Centrepoint) don't understand APR (shame it isn't taught in schools), let alone the difference between APR and AER.

They may not form part of your world, but there are thausands of people who can't understand (or even read) T&Cs, who have people kicking the doors in to collect debts, who aren't allowed bank accounts, let alone loans. I think cashing on people's vulnerabilites (call it bad decisions, stupidy, whatever makes you happy) it dispicable, though of course most people in sales / marketting do it for a living to some degree.

just tried to get a quote form their website (which is so clever you need to tell it how long you've been in your job, having just said you're unemployed)
sadly you have get a callback for a quote.

pwhittle

currently no law in Brittain. not sure the new right wing Brown would care either way!

dpb

I know a local garage owner who lends money

he charges a rediculous amount of intrest - not sure its legal !!!

teh punters even come round to borrow money off him for theyre hols spending money

and he still gets a bottle off whiskey off them come xmas time

Clarebabes

What company is that? Do they have a website?

Daz1121

Surely you mean 17.7% not 177%

Chris L

No almost certainly 177% At the rough end of the market, rates are sky high because the risks are high. Ignorance, or a willingness not to look too closely at the small or sheer desperation will drive many to these sharks

Terminator X

iTrader: (7)

It's a crazy world. I have a problem if someone suggests paying more than 7% APR for anything ...

TX.

kingofturds

iTrader: (1)

Probably aimed at people on benefits looking to buy a plasma tv. high risk hence high rates.

Trout

iTrader: (1)

I worked for the biggest Credit Union in the UK on a consulting assignment about ten years ago. These are not typically people borrowing to buy plasma TVs.

The two main products were the 30 week or 52 week products. The way it worked was based on affordable payments and at this end of the market (ten years ago) it was usually £10 a week.

So the 30 week product was £200 up front and £10 per week paid back over 30 weeks, £300. The 52 week product was £300 up front and £520 paid back.

The agents were locals who 'ran' a street or block of flats. The default rate was very low (contrary to received wisdom). The reason was two fold - the agents have all been through the mill themselves and know exactly when to go and collect money - after the dole cheque, before the Pools man and Bingo night. Secondly there was huge peer pressure. In a agency of 100 potential customers, between 50-80% would have a loan at any one time and truly depend on it. In this case there was tremendous pressure as individuals were led to believe that if someone defaulted no-one in the agency would be able to borrow any more money.

Henrik

iTrader: (5)

I pay about 100% APR when I borrow from the Bank of Wife

pwhittle

no, that was just over the road, some cheque cashing place. amusingly the sign showing the happy people was so big that you could actually read the small print from over the road

pwhittle

I haven't found a direct opne, but if you Google them you can go to a comparison website. I put in really bad details, but it wouldn't quote me online

not sure I should name names

s
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there's different variations of the name though
some of these companies force you to take out their insurance which add a heck of a lot to the repayment, effectively jacking the APR (or AER) rate up

There one advertises on tv saying everyone can now have a huge plasma screen etc. They fit a unit to you kit they sell you, and you keep feeding in £1 to keep using it. DOn't need a credit reference, and they costs are unbelievable, several times the original cost of the kit
then people get a loan to pay that off etc...
many just need good advice, not rip-off merchants using Carol Vordaman to drag folk in

PeteBrant

I want to see a link to this 2600000% APR place - How on earth are you going to collect debts at that interest rate?

pwhittle

thinking abou tit, I bought a £1500 camera (for my business) in 12 month interest free. Thoroughly checked the small print, I'm and ready to sort it out before the 12 month is up. THis was done with thorough credit checking, through a reputable seller.
Here's the catch, of I don't pay within the 12 months, they charge 29.9% APR retrospectively. Therefore they'll charge me around £400 straight away.
I also got a call from them trying to make me sign up to repayment insurance, which I was told was only £10 / week. £520 / year to cover a £1300 loan (actually, what he quoted was for the full £1500, even though I'd paid a £200 deposit, so they were trying to rip me off there too).

I took the deal fully understanding it, and double checked my understanding with them first, but I suspect many wouldn't.

pwhittle

can't link to it, as it's the result of a quote for someone on benefits, debts, npoor credit history etc. You also can't link to an insurance quote of £125k for 2 19 year old sharing an Escort Cossie in London, but Top Gear got one.
What I've seen Googling, they charge well over 100% for pretty much anyone

pwhittle

quick link for examples

1




Debt advice workers stated that sub-prime lenders were widespread in Bristol, with BrightHouse in Bedminster and Broadmead, ShopaCheque in Bedminster, Bristol finance (3/4 offices and charge 240% APR), Surr Finance in Southmead Road (777% see frontispiece), plus Provident, Morses, and London Scottish operating on a peripatetic basis. Interviewees argued that the clients of moneylenders are not looking at interest rates as they have few alternative options. This is particularly true around Christmas when the moneylenders are actively promoting themselves. According to debt advisors the typical debt to a moneylender is £500.

PeteBrant

Of course, but 26000000% is just on a different scale - I mean it's completely unworkable. Maybe variosu calculations bring the total APR out at this, but in reality yuo would never be paying this rate, simply because unless you are a multi millionaire, it is simlpy not possible.


I quite agree with the general point you are making though, there are some dreadfully unscrupulous parasites out there, making money out of those least able to afford it.

Bit like estate agents, insurers and recruitment agents, really.

pwhittle

you're right, you would probably never get it, it more a case of them just not wanting the business I suppose. Still, evet at 777%, you can afford a fair few defaulters and still rake it in.

Most towns have a credit union which can't charge more than 2% /month, and will lend to pretty much anyone, but of course they can't run expensive adverts.
Trouble is, they need people to save with them, as they're only allowed to lend upto 90% of their savings value (unlike Northern Rock), and there's rates are are kess than most BSs.

Who was it who said 'neither a borrower ot a lender be'? Obviously never owned his house, or had any mates!

PeteBrant

It was Shakespere!

Probably didn't have the same money worries as your or I

kingofturds

iTrader: (1)

Hers a bargain interest rate I am sure these lot were on watchdog a while ago.
Provident Personal Credit - Cash Loans Direct to the Door

Devildog

There is, although you have to be declared bankrupt for it to apply.

Whitch is akin to that old stable door and horse saying

pwhittle

my mum used to collect for them - I spent many a winter's evening trudging round council estate, watching people turn the lights out and hide, so they didn't have to pay their £1!

logiclee

Father in law is a debt collector, runs his own company, buys in bad debt etc. Mainly from Black Horse and reputable firms but their are some unbelievable things come through.

He knows from his contacts that some companies will loan someone a fiver in the morning and collect a tenner in the afternoon.

What's the APR on that?

Cheers
Lee

lozgti

Remember this one? Borrowed £4k were chased for £380,000 (that was 'only' 34%)

Was thrown out by a court though

London North Securities Ltd v Mr

boomer

You are now in BIG trouble - you might want to check out Item 8 under their Terms and Conditions (i am afraid that i can't post a link because i have visited their web-site which automatically means that i am bound by them even though i hadn't read them in the first place)!!

Heck, with Ts&Cs like that, they could charge you ten zilllion percent interest, take your first-born, park on double yellows, protest without permission outside parliament and refuse to get their house HIPped - and still be above the law

...indeed the 31-week loan interest rate is silly money

mb

Terminator X

iTrader: (7)

I've heard that this happens ... how does it work though?

TX.