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    Payday loans to be capped at 100%.

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    papa_umau
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    Payday loans to be capped at 100%.

    Post by papa_umau on Tue 15 Jul 2014, 11:21 am

    From next year no such loan will more than double the capital sum borrowed.

    The City regulator has limited the amount payday lenders can charge in fees and interest, proposing that the cost of a loan should never exceed the amount borrowed.
    In new proposals set out on Tuesday, the Financial Conduct Authority (FCA) said that from next year payday loans should be subject to:
    A maximum of 0.8pc in interest and fees a day for a payday loan
    A maximum 15 default fee for customers who miss repayments
    A total cap on interest and fees of 100pc the amount borrowed, no matter how long the loan runs.

    Read more on this from The Telegraph HERE




    At last, some sense is being injected into this rip-off market.

    We will have to watch this one, as it may put many of the bigger payday loan companies out of the game and their adverts off our TVs.


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    zathrus
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    Re: Payday loans to be capped at 100%.

    Post by zathrus on Thu 17 Jul 2014, 11:29 am

    I will accept that when I see it.

    And, why are we waiting until 2015 for it to take effect ?
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    papa_umau
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    Re: Payday loans to be capped at 100%.

    Post by papa_umau on Fri 18 Jul 2014, 12:31 pm

    Maybe they are waiting because this change is going to take a lot of organising ?

    At any rate, if this DOES happen we are going to see many of the payday loans companies starting to refuse to give loans to less-secure individuals and others that might be liable to default on repayment.

    This could have the effect of driving more of the poorest people right into the hands of the loan-sharks once again.

    What needs to happen is that the government needs to start a national loans bank that does give to the poorest people at decent rates of interest.

    OK, I know we already have the Credit Unions, but even these have to try not to take on high-risk customers.


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    zathrus
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    Re: Payday loans to be capped at 100%.

    Post by zathrus on Thu 24 Jul 2014, 12:10 pm

    This might sound cruel, but I think that the people in monetary dire straits should have the sense to stay away from both the legal and the illegal loan sharks. If they don't then a lot of the blame for them getting even deeper in debt has to fall on their own shoulders.

    Debt begets debt and always has, and trying to borrow ones way out of trouble almost always finishes up withe these people being worse off.
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    papa_umau
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    Re: Payday loans to be capped at 100%.

    Post by papa_umau on Fri 25 Jul 2014, 12:35 pm

    So true Zath'.

    The thing is that there are many people in Britain that CHOOSE to live in debt and it is these people that will either go to the payday lenders or the loan sharks no matter what.

    Maybe the government's job is to protect these silly people from themselves ?


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