I know I’ve written a few times about pay day loan companies before but they make me so mad that I’m going to write about them again. To be honest, I’d write about them once a week or more if I thought it would stop people from taking them out!
The thing that I hate about these companies is that they prey on people who are often too desperate for money to consider the consequences of taking out a loan like this and the very nature of the way the loans work means that it’s all too easy for debt to spiral out of control very quickly.
Not only do am I subjected to the advertising on TV which makes a payday loan sound like the perfect solution for short term money troubles, I also get daily emails from companies telling me I could have money in my account within two hours if I wanted it.
And now, today I get a text message from a company telling me I’m pre- approved for £700 which I could have within 15 minutes if I apply online now! A text message!
I just find it ridiculous that companies like this are allowed to do this.
I could quite easily have clicked on the link (blurred out above because I refuse to advertise this companies name or website) and in the time it took me to write this, had £700 put in my bank account.
Looking at the site it tells me that bad credit isn’t a problem because the funds are only being loaned to me for 31 days, and in fact, it goes on to tell me that most lenders specialise in people who have a history of poor credit so if I have bad credit (I don’t) I shouldn’t worry!
The minimum criteria is that I am 18 and over, can provide proof of my identity and I must have a bank account and when they give me the money, they’ll set up a Direct Debit the next month to take it back along with the charge I would pay to lend it. Except that if the Direct Debit isn’t convenient, I can just give them a call and they’ll rearrange – for an extra charge!
I would imagine that in a lot of cases the Direct Debit isn’t going to be convenient as most people taking out one of these loans aren’t going to suddenly come into money the next month and be able to pay the loan amount plus the charges back – it’s just a never ending circle for some with the charges increasing every month.
On a loan of £750, the repayment amount within 31 days would be £937.50 – almost £200 to borrow it for a month. And if I couldn’t afford to pay it back the next month and I deferred the payment, that would be another £200 to pay the following month!
Surely that’s just a legalised loan shark isn’t it?