I must have done something bad to someone in a former life because I seem to have been placed at the top of some sort of mailing list that seems to indicate I have no money and will do anything to acquire some! I receive at least one e mail a day and one text a week from so called pay day loan companies who promise they can lend me some money to get me through to my next pay day.
The e mail I’ve just received promised me that this particular company could make my pay day come early with an instant online approval for up to £1000 of same day cash and has a nice big green button for me to click on saying ‘GET MY CASH’.
Now in theory it all sounds very good except for a few teeny tiny facts, the first of which being the absolutley astronomical charges for these short term loans. When I clicked on the ‘GET MY CASH’ button (for research purposes only ;-)) I was presented with the following information:
Representative 2623.3% APR. Representative example: Borrow £225 for 29 days.
The total charge for credit is £67.50. Interest is fixed at a rate of 377.8% p.a.
The Total Amount Repayable is 1 payment of £292.50.
Which shows that to borrow £225 over 29 days, you would pay back £292.50 with a representative APR of 2623.3%. If a credit card company charged rates this steep, they’d have no customers left would they?
Another thing to consider is that if you do take out one of these short term loans, you have to pay it back. I know that sounds like a bit of an obvious thing to say but you need to realise that the next month the money needs paying back with the interest so you’re not only the original amount down again, but you’re also down by the amount of the charges. I would imagine that this leads a vicious circle with some people choosing to take out a further loan, incurring more charges.
If ever you think about taking out one of these loans, please, please Don’t Do It. I know as well as anyone that it’s easy to run out of money but there’s usually an alternative to these extotionate loans. Keep a close eye on your bank statement so you know exactly how much money you’ve got left, that way you’ll know in advance if you don’t have enough money to get you through to your next pay day. If you can see you’re going to run out, take action as soon as possible and consider doing a car boot sale or listing items on ebay to make some extra cash – You’ll be surprised how much you can make. You also need to sit down and work out a budget as soon as possible to make sure you’re in better shape for future.
As well as the pesky e mails and texts, I’ve also received a number of requests for advertising quotes from these pay day loan companies as they feel that their ‘service’ would benefit you all – I disagree completely and usually send them an e mail explaining exactly why.
*steps down off soap box and heads off to have fun with the kids*