Gransnet forums

Legal & money

Have you ever applied for payday loans?

(21 Posts)
Twinflower Sat 02-Mar-19 17:41:22

Is it truth that they lead to a debt cycle? Personally I borrowed money from banks only and that was really rare.

FlexibleFriend Sat 02-Mar-19 18:08:15

No sane person would apply for a pay day loan the interest rates are absurd. So of course they trap people into a debt cycle. The people that use them are usually desperate and borrow to get themselves out of a hole when in fact they are just digging a bigger hole.

Mania Tue 05-Mar-19 11:45:23

Depends on your situation. Personally I would try to borrow some money from my friends or family. I think that it's anyway the safest way in such case, credits or payday loans are the last idea in my opinion. For example, payday loan is a short-term financial help and it's often used in such cases. Applying for these loans is very easy and fast, it doesn't demand a lot of paperwork and you get your cash fast too anytime you need Your bad credit history won't be a problem too which is very important for some people too. But comparing with classic credits payday loans have very high interest rates and your should be very careful with meeting their repayment terms. If you miss them, you'll get very high additional fees too and repaying all debt can become a very big problem. Many people made new debts because of this and were caught in a debt cycle

janeainsworth Tue 05-Mar-19 11:54:45

Depends on your situation. Personally I would try to borrow some money from my friends or family

“Neither a borrower nor a lender be
For loan oft loses both itself and friend”

Shakespeare was on point 👌

gillybob Tue 05-Mar-19 11:59:28

Thankfully I have not, but know a few people who have. Desperate times can often call for desperate measures.

How can anyone borrow from a friend or relative when they are as poorly off (if not worse) that you might be?

So easy to condemn when you haven’t been in a desperate situation yourself.

I just wish there were better regulations on these loan companies or better still a loan fund that people could turn to in times of desperation, that charges a fair interest rate.

M0nica Tue 05-Mar-19 13:46:11

I would never condemn anyone for taking out a pay day loan. For those whose income is small and possibly uncertain, where else are they to get a lone for that sudden emergency, banks and the usual channels will not lend to them.

I can see the loans from the point of the payday lenders. They are lending to people who are poor credit risk, who are much more likely to default so interest charges must higher, otherwise the lenders would go bust.

However most lenders know they have their lenders over a barrel and many of their rates are extortionate. I think the government should regulate the sector and cap the rates that can be charged.

M0nica Tue 05-Mar-19 13:47:03

I have confused lenders and borrowers in several places. I am sure readers can work it out.

grannyactivist Tue 05-Mar-19 14:28:36

Twinflower Is it truth that they lead to a debt cycle?

Yes, it is, without a shadow of a doubt. People who literally have nowhere else to turn take out these loans, often without understanding the exhorbitant rates of interest, or knowing they will have to make massive repayments, but seemingly having no other choice. I cannot understand why the government doesn't legislate against this 'daylight robbery'.

I agree with M0nica, I think that such loans should be made illegal and/or interest rates should be capped. A much more affordable alternative to a payday loan is a loan from a credit union. There’s a cap on the amount of interest they can charge – 3% a month or 42.6% a year APR for England, Scotland and Wales, 1% a month or 26.8% APR for Northern Ireland.

Gilly, some local authorities do give loans under exceptional circumstances, as do a few other organisations, but these are generally not publicised for fear of lenders being overwhelmed. When people are desperate they do what they need to do in the moment; robbing Peter to pay Paul is sadly how many families survive. sad

Cold Tue 05-Mar-19 15:14:45

Some of the Payday loan companies charge scary amounts of interest. I saw an advert the other day where the "typical" APR interest was 1294%!!

Framilode Tue 05-Mar-19 15:24:21

Be careful MOnica you'll have Gabriella G54 on your back.

sodapop Tue 05-Mar-19 16:39:00

I agree MOnica those rates of interest are prohibitive but they target desperate people who can't get cash any other way. I thought the Government had already taken action against these companies.

MissAdventure Tue 05-Mar-19 16:41:04

Its much like the 'Brighthouse' lot.
They should all be regulated, if not banned outright.
That would mean something more humane being put in place though, I think.

M0nica Tue 05-Mar-19 16:42:51

It is alright Framilode, I am not easily overset. I can cope with GabriellaG54

M0nica Tue 05-Mar-19 16:43:23

Whoops some * missing above.

aggie Tue 05-Mar-19 17:27:12

We have a Credit Union in the village , much safer than those firms . I have savings there and my children have had loans and now savings

Greta8 Tue 05-Mar-19 17:45:46

Credit Unions are marvellous, save even a small amount regularly and you can get a loan at a very reasonable rate of interest.

notanan2 Tue 05-Mar-19 18:57:04

It takes money to make money

The reverse is that poverty breeds poverty... if you're on the bones of your arse the better cheaper options aren't available to them

Newatthis Tue 12-Mar-19 17:57:55


M0nica Tue 12-Mar-19 19:14:34

I think we all know this, as you would find if you had read the other posts on this thread.

and do not shout, it is bad manners.

gillybob Tue 12-Mar-19 21:55:19

It takes money to make money

So true notanan

I have said this a few times before on GN MissA that If I ever won the lottery I would stand outside the Brighthouse store in the town where I work and escort the poor unfortunate souls forced to use this vile place, to Argos or Curry’s and buy them what they needed. Imagine desperately needing a washing machine and being forced into paying over 1000% interest for it? Apparently there is soon to be a degree of regulation but it will only say that they cannot charge more than twice the actual RRP of the item, which is almost always a “special” (not sold anywhere else) so they can make up any RR price they like.
Disgusting. angry

Alexandradedd Fri 26-Apr-19 17:35:05

Message deleted by Gransnet. Here's a link to our Talk Guidelines.