my-pay-day-loan-blog

Smarterbuys seeks to rescue Brits from payday loan providers

Mon, 24 Jun 2013 09:55:55 +0100

A new website seeks to rescue lower income earning Brits from the clutches of payday loan providers by offering household goods at prices as much as 50 per cent less than recommended retail price.

The Smarterbuys site, operated by the Northern Housing Consortium, was designed to be the antithesis of high street retailers such as Brighthouse that offer hire purchase for household goods. Such hire purchase shops have been compared to payday advance lenders for the amount of interest charged to customers, which can sometimes inflate the cost of a purchase as much as double in comparison to a retailer that doesn't offer credit hire.

The new website, which also wants to encourage customers to make responsible financial choices and not resort to high interest rate short term loans from lenders that may be more interested in collecting fees than providing much-needed credit, will be open to anyone. Smarterbuys has plans to offer deals regularly and also provide customers without access to debit cards or prepaid cards to make a purchase online and then submit payments in cash at their closest PayPoint counter.

Smarterbuys says that it will also act as an encouragement to customers to seek out responsible lending through their local credit union instead of having to resort to taking out no credit check payday loans, which may be highly accessible but carry hidden costs and fees that can lead to runaway debt all too easily. If a customer takes out a loan from a credit union in order to pay for Smarterbuys' first deal, which will be a bed, then the consortium claims it will be £650 less expensive than if a consumer used funds from a payday loan or purchased it from a credit hire store.

UK lags behind US in regards to wide finance options

Thu, 24 May 2012 12:14:41 +0100

New research has recently discovered that the UK lags far behind the US when it comes to finance options that cut out banks recalcitrant to provide cash loans to businesses and consumers alike.

The Federation of Small Businesses recently found that, unlike in the UK, where there are only five large-scale lenders accounting for in excess of 90 per cent of lending made to SMEs, there are fifteen thousand such lenders across the pond in competition to provide credit co companies. FSB head, Graeme Fisher, said that while access to finance in the UK is quite difficult due to a lack of business lending alternatives, non-bank lending to consumers through the use of payday loan providers has become quite prevalent - perhaps even to levels that may be unsustainable.

The Government has taken steps to both reduce the number of payday advance lenders that are preying upon what could very well be vulnerable individuals in need of cash to pay the bills and to increase the amount of business lending that does not rely upon High Street banking providers in order to revitalise an otherwise moribund market. Alternatives that have seen more development abroad, such as invoice finance, asset leasing, community finance institutions, and peer-to-peer lending, are slowly beginning to grow here at home, experts say - and the adoption of these alternatives could spell the difference for a number of SMEs in the UK.

Are APR interest rates misleading customers?

Mon, 24 Jun 2013 09:57:16 +0100

In the current financial climate, many Brits have decided to turn to any port in a storm, which has resulted in the payday loan industry to explode in popularity, even in the face of massive Annualised Percentage Rate interest rates on these cash loans, but are these APRs misleading to customers?

The average APR quoted by payday advance lenders is anywhere from 1,000 per cent to 4,000 per cent, which leaves a bad taste in the mouths of many people. However, many industry experts say that this sky-high APR is actually misleading because these are short term loans, with terms that are typically 28 days or less.

The typical price of a payday loan is around £25 per every £100 borrowed. While this is often relatively inexpensive if done only once or twice over the course of a year, the true danger lies in borrowers finding themselves unable to repay the loan in full by the required date, which results in lenders 'rolling over' the loan for another month, with compounding interest accompanied by massive spikes in charges and fees that often make bad situations much, much worse.

However, most lenders typically do not inform their prospective borrowers regarding the dangers of having to pay back a rolled-over payday loan, as they are only bound by law to publicise their APR. Many consumer campaigners have protested this, which has culminated in the Office of Fair Trading launching an investigation into the industry in a search for 'sharp practices' such as obfuscating the true costs of taking out payday lending.

New report reveals families increasingly harassed by debt collectors

Fri, 30 Mar 2012 16:28:22 +0100

A new report recently revealed that families hard-pressed by the economy and having trouble repaying unsecured short term loans and credit card debt are being harassed more and more by debt collectors.

The new report, published by the Citizens Advice Bureau in Cornwall's campaigning action group, has revealed that the pressures debtors face include a veritable deluge of threatening phone calls and letters from collectors employed by payday loan companies and credit card firms. CAB Cornwall chief executive, Graham Tierney, remarked that the CAB's research had discovered that some lending firms may be neglecting to follow guidelines issued by the Office of Fair Trading, leading to many having to struggle with anxiety, depression, and crippling stress as they struggled with their debts.

Tactics employed by providers of cash loans and other forms of unsecured credit include making unreasonably oppressive and frequent telephone calls at all times of the day, refusing to act with the CAB and other authorised third parties, and writing frequent threatening letters, Mr Tierney added. CAB research revealed that nearly 4 out of every 10 individuals aided by the bureau have admitted to feeling as if they had been subject to harassment by more than one bill collector, with the tactic used most often by lenders being sending cajoling text messages and phone calls, with one stating they had been called 10 times in one day, while another reporting four text messages on their movile and eight calls a day.

Some Cornwall CAB clients have reported being subject to long phone conversations where pressure was exerted over them to repay their dets, even though the OFT code considers this behaviour to be oppressive.