someone pushed an A5 leaflet through my letterbox which is printed front and back with photographs of low to medium value electrical goods for offer with no credit check, weekly collection typical APR 739.9%
it's certainly immoral but is that level of interest legal ?
That's insane.
Badass.
If you are on extremely low income, and someone lets you have a 20 quid gizmo for a pound a week for 25 weeks, it's probably the only way you'll get it. Legislation iwas discussed recently, dunno if anything came of it, but the suggested limits were pretty high, but surely not to your example's level.
Tiddy Ogg.
My maths is SUPER s*it, but if the APR is as he suggests over 700%, will an initial loan of say 20 not eventually be repayed around the 140 level? I suspect he might have made a typo...or the original flyer designer made a typo.
Badass.
In message , . writes
If it were a TV rental company it would be legal. The only difference is the TV Rental company will always own the TV, but the loan scheme means you end up owning it. The payments might be very similar, but because the loan scheme is regulated it must quote an APR.
"Tiddy Ogg" wrote
I make that only(!) 153% APR.
To be 739.9% APR, you'd need to continue paying the "pound-a-week" for about another 19 weeks (44 weeks in total) ...
"Badass Scotsman" wrote
That would of course only happen if there were no repayments made at all for a full year, then the entire lot was paid off at the end of 12 months.
Per my other post, if it was paid off at the rate of "a-pound-a-week", then it would cost 44.
Just as well im not a financial advisor me thinks... :) Fancy showing me your calculation so I can grasp what your saying? :)
Badass.
no typo, 739.9% e.g. "credit 150 15 weeks at 15 Credit 75.00 Total payable 225" from EMDM Ltd - no trace a co house but there is a local co. which seems to fit the bill (but I won't name here) the leaflet only has an 0700 telephone number, no address on the leaflet and no consumer credit warnings or disclaimers.
curiously, there's a couple of google references to EMDM credit and one of them from 11 feb 2006 on a forum called this is money, a posting from someone EMDM, seeking a finance house willing to loan the unemployed up to 250
from the information supplied, has the company done anything illegal which would be worth reporting them to trading standards / consumer credit watchdogs ?
I'm sure it's perfectly legal if it clearly states the rate. Why on earth wouldn't it be?
Aren`t lenders supposed to register somewhere, like the FSA ?
The justification for this is that it allows small, short term (in theory!) loans to be profitable. For example if someone needs a loan to keep them ticking over until the next pay day, borrowing 100 and paying back, say, 125 a fortnight later (%25 in 2 weeks, (very) roughly %650 in a year) might make a lot of sense: both sides of the deal get something out of it. But the interest rate is *huge* when judged by normal commercial standards.
It is, of course, a financial disaster if used in the medium or long term.
Andrew McP
Because there is a law that makes excessive interest rates illegal.
Whether or not such an interest rate is legal depends on the other terms of the loan. So on the basis of the information given it is impossible to tell.
tim
that's what I thought, I'll call TS tomorrow.
and that may put it even further in the 'red'.
The APR is wrong for a start.
If the weekly payments are a tenth of the amount borrowed, and there are 15 weekly payments, this makes the weekly interest rate 5.5565% and so the APR isn't 740%, it's 1577%.
if you are sure of that figure I'll report that, too.
I'm sure Tim will be pleased to confirm it.
(1.055565^52.17-1)/100 = 1533%
(1.055565^(52.17)-1)/100 = 1533%
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