THE 2356% LOAN

£30 interest to borrow £50 for 2 months

By Sophy Ridge, 08/11/2009

VULTURE loan firms are charging desperate families more than 2,300 PER CENT interest in the run-up to Xmas.

Payday lenders - often more expensive than loan sharks - are preying on the poorest, offering short-term loans at eye-watering interest to be paid back when the wages go in the bank.

One company QuickQuid charges 2,356 per cent APR on loans, and its profits are soaring.

An average QuickQuid customer will pay back up to £79.50 for a £50 loan borrowed over two months.

A typical bank loan carries around 10 per cent APR, while doorstep lenders offer APRs of around 189 per cent.

Chris Tapp, director of debt charity Credit Action, said: "This interest is astronomical even for a payday lender. People think payday loans are quick and easy, but borrowers often spiral into a debt nightmare. If you haven't got enough money to get by one month it's unlikely you're going to have any more cash to spare next month.

"And having money immediately taken from your pay packet will make everything even harder."

The numbers turning to payday lenders have TRIPLED since 2007, according to comparison website moneysupermarket.com.

QuickQuid's parent firm Cash America saw earnings soar in the third quarter of this year to £13.6 million. It said last night: "Most customers facing financial emergencies use short-term loans wisely. The only way to reach the much-hyped APR is to take out one advance and continue to renew it for an entire year. Our fees and terms are clearly posted on our website."

Your comments

This article has 5 comments

Alan you took the pay day loan as you put it, did you not look at the repayments or did you choose not to due to your own greed for a loan. You are the reason the past 2 years have been such a mess. People taking loans they cant afford.
As for the company not collecting it because you said you wouldnt pay, id wait for the knock on the door from the debt collectors. Good luck getting credit in the future after that.
And you are the reason people have to use these so called sharks because you dont pay your debts in the first place.
You may want to do what the rest of the population does and save some money and stop being an excuse maker for your own failings.

By Nik. Posted November 9 2009 at 8:58 AM.

Pdrovident have been a lender for 127yrs.On their website they advertise a loan of £300.00 at 272.2% total payment being £546.00 over one year,are they classed as loan sharks? If not they should be

By christine. Posted November 9 2009 at 2:03 AM.

One of these firms had been overcharging me for months on payday loans. I eventually said that they had had enough out of me, and refused to repay the £1299 they wanted (for a monthly payday loan of £1000). After they kicked up a stink, I told them to sue me if they wanted the money back. I haven't heard back from them. I'll consider giving them around £500 once I start working again.

By Alan. Posted November 8 2009 at 1:12 PM.

Short term loans will always look bad because of the way APR is calculated.
Plus would you lend these people your money? Try collecting on these loans youll change you mind very quickly.
And withdraw these supposed sharks and youll end up with the real sharks coming out of the wood work breaking fingers for missed payments.

By Nik. Posted November 8 2009 at 4:57 AM.

Just watched Shylock in Merchant of Venice but these guys could show him a trick or two.Absolutely disgusting but really just a sign of our sick society when the most vulnerable are trapped into this outfits clutches.
And its all legal.The computer says so.

By alecko. Posted November 8 2009 at 2:02 AM.

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