Tread carefully.
Atticus writes:
Heard an ad on the radio this morning (Today FM) for a company that was doing cash loans. Even though they said that “Provident Personal Credit Limited (trading as “Provident”) is regulated by the Central Bank of Ireland” it all sounded a bit suspect so I did a quick check on their website.
You can borrow anything from €100 to €500 and you have a choice of two repayment lengths, 26 or 52 weeks.
26 weeks is at a rate of 187.2% APR or 52 week is 157.3% APR
That is some mark up! How is the Central Bank approving those rates? I’d say it’s also no coincidence that the ads are starting to appear just before the kids go back to school…
Anyone?
Sponsored Link
Scandalous.
And on that note, the OH got a phone call from her credit union the other day offering her a loan of up to €5,500.
Is that normal?
Not with her credit rating, no.
zing
sort of. Rightly or wrongly, here’s where a lot of credit unions find themselves (may also apply to banks)
a) folk are saving more nowadays – the last few years have made some people more careful
b) credit unions are sitting on piles of cash
c) with those piles of cash, you can do one of two things – invest it in another savings product (fire it into a bond of some description, earning a measly percentage rate, because rates are falling) or loan it out at a higher rate.
d) you make more on loaning it out
e) when it comes to the AGM members are looking for a dividend, so you’ve got to make a few bob *somewhere*
f) thus a lot of them will look at folk and offer them loans.
members would still have to go through the standard loan application procedure….
a) I think
b) those alphabetised
c) bullet points
d) are slightly
e) superfluous.
heh
Short term loans are expensive. If you need to borrow €200 obviously you’re a flight risk, and someone has to pay for it…
Watch UK ads, there are some really amazing APRs there, recently I’ve seen 1300% APR…
‘Regulated by the Central Bank’? Remember Neary the previous bank regulator? He was part of the reason the banks were never regulated and why we ended up in this mess. Central Bank, in my opinion, are clueless about regulations so stay well clear of these ‘loans’
They did fine them last year, but why facts?
http://www.independent.ie/business/irish/irelands-largest-moneylender-fined-105000-by-central-bank-30787590.html
fact is they fooled us all hard in the hole in 2008 and now most of my mates have left and I’m living from paycheck to paycheck. but hey, don’t let facts get in your way
Good one Mike. So Central Bank have BEGUN to do the job they should have being doing. Woo Hoo ….. bring on the champagne ….. and maybe take back the big pension handout that Neary got ……. that would be a proper start ….
Correct me if I’m wrong here but at 187.2%, you pay back the initial loan PLUS the 187.2%, right? So for 500 quid over 6 months you’re paying them back a total of 1436? That’s unbelievable.
No you pay 87% of the loan amount.
Your total repayments is €650 so €150 in interest
So by your logic a more normal apr of, say, 6% would equate to the lender actually asking for less back than they originally gave you.
its the website that’s wrong – it’s quoting 157% as the APR when thats actually the capital + the interest so the APR should read 57%. It says further down the page “Rate of interest 56.0% p.a. fixed. “
There is a special place in hell reserved for these usurious companies.
Anyone using them for such small amounts would generally be the “unbanked”, don’t have an overdraft facility, credit card or even modest savings.
They are people who are already vulnerable for whatever reason and these rates are exploitative.
I suppose though, its one step up and away from loan sharks who would break legs if not paid back.
Provident is known throughout the lower socio-economic areas here and UK. The interest rates of a loan shark, without the beatings. Yes, they’re also market savvy. End of August and coming up to Christmas.
Check out Littlewoods too. They offer higher purchase credit on all their stock with some of the highest interest rates around.
Just in case anyone is useful info here
http://www.citizensinformation.ie/en/money_and_tax/personal_finance/loans_and_credit/moneylending_in_ireland.html
These guys are vultures. They go door to door in under privileged neighbourhoods offering personal loans at exorbitant interest rates. Preying on ignorance and desperation.
PC World will do first six months interest free if you pay them back within that time.
Just thought I’d mention that ’cause like I was just like looking to do that like, and probably will.
Like Damien above was saying, there’s been an explosion of these companies in the UK. But they always have rates of the order of 1000%+. Some have been very successful like Wonga. Corporate Shylocks.
Wonga is in serious trouble:
http://www.theguardian.com/business/2015/apr/21/wonga-weighs-up-a-name-change-as-it-slumps-into-the-red
from wonga’s site:
Representative example
Borrow £100 for 13 days
Interest rate 292% (fixed)
One repayment of £110.40
Representative 1,509% APR
yike!
You see a money lender going to the family across the road every Friday for years doing collections. You also see the chipper or pizza crowd delivering every other night as well.
Because sometimes, its easier to feed a lot of people with pizza then it is to go out, pay for public transport to get to the decent shops, not the shit local ones where everything is marked up, buy the ingredients and use the gas/electric to cook it. But you knew that.
But Lidl is a 4 minute walk away to them and its not like any of the 4 working age adults are doing a hard days work either. But you probably guessed that.
Dey want neutering hun xxx scandalous hun xxx
us mugs out wrkin hun xxx
Oh man! Those complex opinions, carefully grafted from years of reading the Daily Mail’s view of the world sure showed me!! You’re a massive c***nobbler
No I don’t accept that. I haven’t gotten takeaway in 6 months. I spend about €25 a week on food for me and I eat well. I haven’t gotten takeaway because it starts at about €10 per meal per person.
When I’ve barely any money I can’t see how I can afford to get one meal at €10 (and for the sake of argument, let’s say someone can manage it at half that price – €5) when I can get 21 meals for €25. Add on gas or electricity and It doesn’t even come remotely close.
I think it’s a matter of not really knowing truly how to cook properly. A friend of mine who said similar had a shopping list of frozen food. I’m not having a go at what someone chooses to eat but I was surprised he hadn’t thought of buying the veg and meat separately and making something himself if he was that strapped for cash. He said it took too long. I showed him some stir-fry recipes that took 15 minutes before he told me it just felt like too much hassle because he hadn’t done it much before – a different reason than he started out with.
Take-aways are cheaper the more people you are feeding. Take those 2 for 1 deals on pizzas for example.
There is an element of laziness and lack of education/ability to cook too.
There you go: https://en.wikipedia.org/wiki/Payday_loan
Nothing new, except that whoever submitted this to Broadsheet and whoever posted it must have just come down in the last shower if this is new to them.
This is not a “Payday Loan” though. The payback with these loans is over a much longer period as stated. Payday loans can be loans for as little as £20 (or less) afaik.
Oh, and the issue I had with this is the fact that the Central Bank are aware of this and giving it the thumbs up. These loan companies do nothing other than take advantage of the poor.
1. Thanks for clarifying, genuinely.
2. Obligatory “all any financial institution does is take advantage of the poor” remark :)
2. It’s not obligatory, it’s factual in this case. They prey on a certain section of society. And all financial institutions don’t prey on the poor.
We only like new things. Once things are old they should never be mentioned again.
Look at any of the ads for short term/payday loans on British TV. You’ll see APRs from 49.9% for Amigo loans (minimum term 12 months, max 60) to 4,214% for a Wonga loan who justify it by selling it as a short term solution. These companies appeal to those in society who have no option. They are cancerous vampires that are sustained by the aftermath of austerity and cutbacks, high unemployment, desperation and most importantly, poor education. Unfortunately, there is nothing in EU law to stop this kind of vulturism. The Archbishop of Canterbury Justin Welby had mooted starting a bank of the Church of England tasked with managing low interest rate payday loans to subvert these a**holes, but all’s gone quiet on that front.
It later emerged that the Church of England was investing in Wonga and didn’t end the investment for about a year afterwards (July 2014)
My husband and I hit on hard times, missed 2 mortgage payments and as a result have a bad credit record. With 2 teenagers and a broken car, we were forced to look outside bank/credit union for a loan. So far, we have gotten 2 loans from Provident in the past year and they have been nothing but courteous. We leave the money in an area outside the house every week so they don’t need to be knocking on the door, they collect the money and post the book back in the letterbox for the next week.
I agree the interest rates are scandalous but when you’re desperate…
‘Leave the money in an area outside the house’, you are joking I hope.
Mayvus,
Hope you get back on your feet, things have been very difficult for you.
Loads of ideas on handling finances here:
http://www.reddit.com/r/personalfinance/
Mayvus, god point. Thanks to our belowed government credit unions have stopped lending money except to those who already have on depoit what they want to borrow.
Example 1:
a mother of 5 who hasn’t missed a credit union payment in 15 years looks for a €5k loan for a seven seater car. Loan application rejected. On appeal, loan approved subject to the woman getting a guarantor.
Example 2: Billionaire gets interest rate of less than 2% on a €500 million loan from a state owned lender.
Example 3: Teacher who works for 4 years in said profession will pick up full pension on retirement.
Examples 2 and 3 are subsidised by the woman in example 1 who pays her taxes in Ireland.
Example 3: Teacher who works for 4 years in said profession will pick up full pension on retirement.
They get a pension based on umber of years service:
http://www.into.ie/ROI/InfoforTeachers/Pensions/CalculationofPension/
Mayvus sorry to hear about the situation you are in
Have you tried Mabs?
https://www.mabs.ie/
its not really that bad being honest, i mean paying off 150 for a loan of 500 over a year? that isnt that bad, am i missing something here?
Yes definitely.
Our local credit union charges €25.81 for a €500 loan paid back weekly for 12 months, so €150 is really that bad, yes.
I just ran the Guardian loan calculator and the total payment comes out at 1018.92. Twelve monthly payments of 84.91.
Ah, monthly. That does make a difference. Credit union cost of €500 over 12 months: €27.50. Scandalous.
And you get some of the interest back as a ‘dividend’.
They should be shut down.
Yep they’re registered. As are:
The Rock Finance Company: 160.5%
southside finance: 188.45%
stalwart investments: 187.22%
tony kenneally: 187.22%
to name but a few.
All registered as moneylenders, balaclavas and baseball bats not included.
I know there’s no such thing as an altruistic lender, but those Provident ads are creepy. “Our friendly agent will drop the money to you and collect repayments.” (or something like that)
Happy to help (themselves)
That’s the really sinister part. Showing up at your door once a week. imagine the terror / shame of not having the cash.
I think I’m right in saying banks are totally banned from doing it, so why are these sharks?
I heard the ads, terrible, this post just reminded me to let Today FM know of my objection to advertising of these scumsharks. Done now. 1 listener less.