Rip Off Loans Available As An App
Thursday, 4. February 2010
If you have an iPhone – you poseur, I don’t of course, but if you do there are now apparently ‘apps’ for just about everything – so I’ve been told. Apps. standing for applications or software programs. One of the latest ‘apps’ comes from a company called Wonga who provide what are known as ‘payday loans’, allowing people to borrow a sum of several hundreds of pounds to tide you over till payday. But what has concerned finance experts is the interest rate charged which has been calculated at 2,689% with apparently other pay day lenders charging a faint inducing 22,000%. So that great deal on a ‘little old lady owned car from new’ costing a few hundred pounds for one of the kids can end up costing a fortune in interest charges. Wonga point out that APR can be very misleading as in real terms if someone borrows £100 for a week they would pay £13 in interest which many would not find unreasonable. The problem lies with the fact that these lenders allow the borrowers to roll over the interest charges and this can result in some huge interest charges. Doorstep lending is now illegal and the payday lenders are regulated by the OFT but it seems to me that technology has enabled the doorstep to be replaced with an iPhone. Beware of these types of loan, they are not good for your financial health and don’t forget, whilst the lenders are not allowed to make an approach on your doorstep debt collectors can. By Graham Hill
J. Hart Says:
“…if someone borrows £100 for a week they would pay £13 in interest which many would not find unreasonable.”
Full stop.