Payday Loans compared
Your guide to all Payday Loans
Payday Loans are suitable whatever your credit rating may be, and are useful in times when you need a relatively small amount of cash (less than £1000) which you are able to pay back over a short period of time.
'Look around', urge government ministers and finance experts
A new website has revealed an annual percentage rate (APR) of 2,639,539%, prompting outrage across the country at the company which has levied such a high charge on their customers. Now, members of Parliament and finance professionals are recommending that those who are in need of payday loans urgently look around in order to receive the best deals.
Even though the company have retaliated by saying that the high percentage rate was an error, it is understood that a long period of time without repayment could result in such extortionate percentage rates – meaning that it has never been more important for consumers who use the service to pay back the money they owe on time.
The story has even been unearthed in the House of Commons, where a discussion was held regarding the situation of payday loans in the UK. Even though their advantages were agreed, there was some debate over whether or not loan interest rates should be capped in order for consumers to be protected from greedy payday loans which are after the cash of the vulnerable.
There are now some MPs who are rallying around their fellow peers in order for a movement on interest loan capping to be recognised, with the hope that progression with be made into the payday loan market should action be taken.
One of them, Jim Devine, has pleaded for families to take a moment's thought before applying for a payday loan, adding: "With Christmas just around the corner, increasing numbers of hardworking families on low incomes will be tempted to take out short-term loans to buy presents for their kids." He also suggested that there may be a portion of payday lenders who are taking advantage of their clients.
One MP, Angela Smith, says she believes that it is unfair that those who benefit from these services most are the ones that have the least financial stability. She said: "We all share concerns about this because it is often those on the lowest incomes who end up paying the highest prices because of the high cost of borrowing."
The advantage of shopping around has hit home for many consumers who are looking for that financial boost between wage slips. With potential action on the high interest rates that consumers pay on their payday loans, it could simply be a matter of watch this space for now.