To hope that the CofE can kill off Wonga, but think they might struggle?

[ShadeofViolet]

BBC Link

I would love to see an end to Wonga, but we already have credit unions, I dont know how we can change the culture.

IIRC, with our credit union, you have to save first, then you can borrow. Maybe that is what is putting people off.

[Souredstoneshasasouredpebble]

Tbh short term pay day loans aren't a bad thing if used responsibly for emergencies. Sadly people use them to have spends to go on the piss and that's where they come unstuck.

People will always need to borrow small amounts over short periods of time.

[FreudiansSlipper]

if banks were a little more helpful with overdrafts short term loans like they once were many people would not need to use companies like wonga

i have had to use them myself a few times, paid the money back within 10 days or less i have more than 3k going through my account every month and always have a few hundred in my account but my bank will not allow an overdraft as i do not work full time and my salary changes from month to month (i do not earn 3k a month)

[FreudiansSlipper]

but yes they should not be charging people the ridiculous amounts of interest when payments are late

[Souredstoneshasasouredpebble]

I'm not excusing the industry but the rates of interest are a load of shite, it's only because they HAVE to put an APR on the loan that it looks so ludicrous. However, the loans themselves are only supposed to last a month at the most so a late fee is fair and should be expected but should be a percentage of the loan not a fixed rate.

[Souredstoneshasasouredpebble]

Because they are for a month APR is irrelevant as you don't take the mone out for a year

[ShadeofViolet]

The problem is is that most people get caught in a trap.

They are short one month, or they have an emergency so the take out a PDL. The next month they pay it back with their wages leaving themselves short again, so they extend the loan or take out another one. And so it goes on and on.

[squoosh]

'the loans themselves are only supposed to last a month at the most'

Rubbish.

Payday companies target people who are already in pretty precarious financial positions. If you think Wonga expect their customers to borrow as a one off you are deluded. They target people they know will become ensnared.

[Souredstoneshasasouredpebble]

That's where the onus is on the lender to be responsible and step the loan down each month

[Souredstoneshasasouredpebble]

They don't make much profit on return and bad debtors, the money is in selling new loans

[HorryIsUpduffed]

Wonga have the lowest default rate in the industry, you know. It's a very solid business model that the CofE can well afford to copy.

[squoosh]

if someone takes out a £200 loan they then need to pay back £250 the following month in one go. They are the £250 short so need to reborrow.

Wonga makes as much money on them month on month.

[Souredstoneshasasouredpebble]

But they don't. They still haven't had the initial £200 back and have lent an extra £50 out On top to tide the person over. Do you see how?

[squoosh]

They are completely immoral and should be outlawed.

Many American states have banned their trading hence why they are now flooding the UK market.

[squoosh]

What I'm saying is that it's impossible for people to pay them back in one go, people are stuck paying them back month after month often needing to borrow more and more to cover the extortionate interest.

[Souredstoneshasasouredpebble]

No, they need regulating to become better lenders and to loan responsibly. People will resort to loan sharks if they can't find proper ways to borrow the money.

[Souredstoneshasasouredpebble]

Not if they're loaned the money responsibly and are stepped down rather that having their loan upped. So borrow £200 one month, can't pay it back, ok borrow £150 next month and reduce like that until its cleared. People get stuck when their loans are increased not decreased.

[Absy]

Plus ce change - the Catholic church tried this from the Middle Ages onwards, by establishing Monti di Pieta. At the time, lending at interest was prohibited by the church as "usury", so the only people who could loan money at interest in most European countries were Jews (not being Christian, they were exempt from the prohibition). The church established the Montis in order to take business away from Jewish money lenders (largely due to growing anti-semitism). In the end, the "non interest" loans that the Monti offered where actually much more onerous and more expensive than loans from the Jewish money lenders, so a lot of the monti collapsed.

[squoosh]

Credit unions are great, I don't think people have enough awareness of them.

[Quenelle]

The CofE has the advantage over credit unions because it has thousands of premises all over the country at its disposal. Its success will depend on how it services bad debts if it doesn't charge Wonga's high interest rates.

I hope it works. I'm not a fan of religion but this could do such a lot of good.

[QueenMaeve]

I know in Northern Ireland, Credit Unions are a life saver for people. They are well run and offer very fair lending. Last winter they offered up to a £1000 low interest fuel loan to all its members.

[thebody]

perhaps the church could sell off its properties including Lambeth Palace and actually put its money where its mouth is for a change.

[gotthemoononastick]

Utter money grabbers.So immoral and have apparently left corpses in their wake in a shall we say less sophisticated country.Money money money in a rich man's world.

[Souredstoneshasasouredpebble]

Not the firms fault that people took multiple loans with multiple companies and over stretched themselves.

Perhaps if the lenders out independent debt counselling advice or where to access it in with the loan paperwork it may help?

People are responsible for themselves, ultimately, yes you can regulate the industry but the majority of the responsibility stays with the individual.

Btw do you like green jelly with your moon on a stick?

[maddening]

Of course the apr is relevent - to see the monthly interest rate divide the apr by 12.

[squoosh]

Payday loans pursue those who are already on the bread line. Why else do they advertise on daytime television?

Yes people are responsible for their own finances but that doesn't mean we should allow companies like this prey on people who clearly have no clue how to manage their financial affairs.