Yeah I'm ashamed to say I had one a few years ago, paid off properly and on time but because it showed on my credit report my mortgage advisor told me I'd be very unlikely to be accepted for a mortgage.
How such a clearly shonky practise has been allowed to go on unchallenged in this country for so long is very disappointing.
People must be mad or desperate to use them. This in itself should preclude them from using it. Its madness to use firms such as these.
Most people using payday loan companies can't get credit from banks or other institutions, so it's usually their last resort. Now their options will be reduced even more, and - oops, just hang on a minute, there's a big bloke banging on my door....
The problem was that nothing was against the law; someone saw the opportunity in the market to legally charge 4,000% APR on a small loan, came up with a great marketing campaign and sat back to watch the money roll in. Unfortunately it does pray on the desperate and the stupid (those two are not the same!) but it's nothing that the banks wouldn't have done if they hadn't thought of it first. Yes it needs regulation to control the spiralling debt business model - a morally nasty but legal way of almost ensuring that you can never escape the debt if you pay only minimum amounts - but it does make it harder for some sections of the population to get access to money to tide them over until the end of the month. I'm sure we've all had unexpected bills to pay for vital things - new tyre from a puncture, washing machine gives up or the boiler goes bang - but some people don't have those resources or the means to pay for these on credit, and may end up worse off (can't get to work because of a puncture and lose shift money) than if they could pay for them. Personally I would prefer that the effort was spent ensuring that these services were not needed; raising minimum wage, removing zero-hours contracts, etc, rather than trying to apply legislation in this area.
My only debt is a very modest mortgage. I live within my means and go without if I have no money. Ive been in some desperate situations in my life, homeless as a youth etc. But I always stayed within whatever means I had. Even when I had no means at all. Resorting to these thieves is terrible and the people who run them prey on the unfortunate. Its socially despicable. They are like vultures on a carcass.
Another problem about loans are the so-called "zero interest" loans. These are always sold on a false prospectus, because there are always hidden charges somewhere in the transaction, or lost opportunities for discounts which would be available to a cash buyer, and these in reality amount to a concealed interest charge for the loan. In my opinion there should be a "Truth in Lending Act" which would oblige all aspects of the transaction, without exception, to be displayed upfront. I tried to interest my MP in this at a time when he was the Financial Secretary to the Treasury (and might have been able to do something about it) but sadly without success.
