To hope that the CofE can kill off Wonga, but think they might struggle?(229 Posts)
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.
People willingly take loans, why should payday loan companies be banned so long as they are clear about high interest rates?
What ever happened to personal responsibility?
This is what the churches should be doing - going to the most at need and helping them. Am sure that churches who host the Foodbanks have sent feedback up the church hierarchy explaining why they see people at Foodbanks - and payday loans must play a big part. My BIL is the director of the local credit union - if it wasn't for that I wouldn't know they existed!
Because not everyone who takes these loans realise the impact it will have on them months down the line. Many many people are without financial sense.
Yes they're clear about the APR but yes they are also preying on the poor.
There have been plenty of posters on this thread saying they have used them and that they have been fine.
I think we have enough of a nanny state already. People are not forced to use them, and I would rather someone used Wonga and couldn't pay it back and damaged their credit rating than used a loan shark and had their knees damaged.
Yes, what a great choice legal loan shark or knee breaking loan shark.
Santander charged me hundreds for going 14p over drawn
PDL also cause great damage to credit files, so while people may use them once, they wont know it could effect them for years after.
Also. If you cant pay wonga back, they will keep trying every day to take money off your debit card as soon as money goes into your account. They dont care if they leave you with nothing.
They also refuse to set up payment arrangements.
£7 on £100 over two days sounds fine. If any of us borrowed £100 of a friend (out of desperation) and then paid it back you would normally go out and buy a bottle of wine/flowers/chocs. It wouldn't be unreasonable to spend £7 on any of these gifts IMHO.
The trouble comes when you don't pay back on time but this is the issue surely. If you borrow money and don't pay back as agreed then, circumstances aside, you are a risk. This is presumably why regular banks will not lend to you in the first place. This is subsequently why people feel they need to resort to these types of companies and why they exist.
Otherwise you are asking a lender to treat everyone the same, irrespective of them being a bad risk and the potential for losing money. This is exactly why bad payers are severely penalised. After all none of us would lend money to a mate that we knew was fecking hopeless at paying back money.
But £7 on £100 and ruined credit for 6 years?
Sorry I didn't read that bit. Ruined credit? People who usually use Wonga have ruined credit anyway - hence them not being able to borrow from a high street bank.
banks are not lending out to people with reliable, steady incomes either
I asked for my overdraft to be increased this month twice, it was a resounding NO. I was lucky that the bank of Mum was open but I am not naive enough to think everyone has that option (and to be fair I think it is the first time I have asked her! and I felt awful doing it)
I recently tried for a loan with natwest (my bank of twelve years) for 4k to clear all my debts. They refused, despite me easily being able to afford the repayments and having previously taken out and paid off in full a loan of similar size when I was younger.
So now I am paying a pitiful amount off my debt each month and it's barely making a dint in the figure. I occasionally use QuickQuid when in a total fix and find them reasonable. Eg £100 over 2 weeks = £112 repayable. I would never defer my payments or anything as I'm scared of costs spiralling. Their customer service is DIRE.
I wouldn't ban them though. Where else would people go for short term loans? (And yes, in an ideal world people wouldn't need short term loans.)
Banks lend to people based on internal risk grading. Those they deem to be a high risk have less opportunities to borrow money, irrespective of income stability. I'm not making presumptions on your financial management Owllady but this is how it is and most banks have tightened their lending criteria slightly.
If you already have an overdraft and have asked for an extension then they see this as a larger risk than they are happy to take. Again I'm not saying anything about your financial circumstances but just that extending an extension just looks like (to them) that you are not managing your account properly.
I think the idea of the CofE supporting credit unions through allowing use of their property (church halls etc.) and financial expertise within their congregations is a very good idea, and really practical way to help the poor and vulnerable in society. (I caught an interview with the CofE rep on this on BBC News today)
I was surprised though that they appear to have gone about it by attacking Wonga specifically (from newspaper front page - i ?) - I would have thought they could have gone about it a bit more positively and said that there is a problem with vulnerable people not being able to access short term loans and so turning to so called "pay day lenders" and they'd like to help by supporting the credit unions to become more strongly established and accessible to all, and would like to offer their premises and financial advice in order to do this.
Basically I think it's a pretty good idea, but have some quibbles over the way the publicity for this has been and is being handled.
Should be a good opportunity to emphasise the practical support of the church for those around us - so far I'm not really hearing that.
I'm glad Mumsnet doesn't allow these pay day loan sharks to advertise on here. I loathe it when they advertise on TV and would like to see that banned as well. I think the C of E means well but it won't solve the problem. The government should step in and ban the pay day loans.
Surely though Vivienne there are alternatives to pay day loans being banned by government, all it needs is some nice, slightly more ethical people (C of E ?!) to come in, set up a better system of loans with lower rates, and people will soon hear about it and choose to use them instead.
Most people, however bad they are with money, or however difficult their circumstances, will tend to choose (more or less) the loan offering them the best deal ?
Wow, sounds like I'm becoming a believer in market forces in my old age
< ponders, time for a blue rinse ? >
BTW - Many of the early banks were set up by the Quakers (or "Friends")
who benefited from their honest reputation to do very well in business
- banking and chocolate manufacture being two specialities
I'm not sure whether CofE just intending to support and encourage (existing and new ?) credit unions, or set up some system of their own ?
Not everyone (by any means) understands what is meant by APR rates they may see mentioned.
Imagine asking people in a street survey how much you'd have to repay on loans of different APR over different time periods, and what sort of answers you'd get !
Justin Welby is the ultimate Poacher turned Gamekeeper.
I think its quite funny really
The Cost of borrowing .....
Put your figures into my spreadsheets and compare
Credit unions only lend money to depositors who are a good risk. Pay day lenders lend money to people with no assets, savings, job, etc. If the Pay day lenders didn't exist or if they made their lending criteria stiffer so that they could charge less interest, the borrowers would not be heading to church, they'd be using unregulated loan sharks.
"I'm not sure whether CofE just intending to support and encourage (existing and new ?) credit unions, or set up some system of their own ?"
As I understand it, they're only offering access to premises... church community centres etc... for the credit unions to set up. They're not planning to back any losses.
I quite agree with OP and without sounding too flippant I would be delighted to see an end to their bloody stupid tv adverts which are on at inappropriate times and I loathe them.
I totally agree that banks need to be a bit more forgiving, particularly with overdrafts. I lucked out and got a £500 overdraft when I set up my account as a student, and they never took it off me - without it, I'd have had to borrow a lot of money from somewhere to cover the shortfall caused by needing a massive rent deposit.
Unfortunately, this isn't going to happen because people take the piss, regardless of the source of money. DP and I used to volunteer at our local credit union, and it basically went bust because so many people were taking out loans and just not giving anything back.
I doubt payday loans are going anywhere, though. Agree with others who say rather bad credit than getting injured for late payment to loan sharks.
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