To wonder who uses the pay day loans advertised on TV?

[PrincessScrumpy]

They have typical 1374% APR on the ad I just saw - who uses them? Surely it's just a company disguising a loan shark and should be banned!

Sadly it's normally the desperate who use them

Desperate people with shit credit ratings.

the people who can least afford them :(

I wonder that as well.
I think you need to be either very stupid or very desperate or both.

who do you think? People with exemplary credit scores who have the time and luxury to shop around for the best deal?

YANBU to wonder and/or to be worried about people taking on loans at such high rates... but... they are usually used for very short-term loans of relatively small amounts so the interest charged is low. Plus they are at least up front about the charges and they are regulated. The alternative for those who use them would be things like pawn shops and 'real' loan sharks.

I hate those adverts. Should be banned as vunerable folk will get in to far too much debt :(

Not always the vulnerable. A friend of mine used one of them recently basically because he is beyond shit with money. He has a good job but owes £15000 on credit cards and regularly goes into his overdraft. He had to get a quick loan to secure a deposit on a rented house so that he could start a new job. It was a life saver for him as there was literally nowhere else he could get it and I have no sympathy for him as he is an intelligent man who just will not sort his finances out.

I hate them. They try to sell themselves in a most dispicable way, as if they are "giving" people money. Unfortunately, people that are desperate might fall for it. They are really only beneficial if you have a variable income and it falls short one month, but you know next month you will earn double and can pay it all back straight away. Sadly, it tends to be people on very low, fixed incomes who get drawn in, and end up paying back double what they borrowed. Sick.

People who are caught in a poverty trap. It is often their only option. The people I teach have poor literacy skills and the % means nothing to them. All too often they get into trouble and bring me letters from the loan company to read. It's shameless because, in my experience, those who use these loans don't understand the maths of it and can't read the agreements. They just need money now for essentials: gas, baby milk etc

Those type of companies are exactly the reason we need to drastically improve financial education in schools (lots of adults would benefit from it too).

The desperate and vulnerable mostly

Desperate people who don't earn much. £100 is still a lot for some people to find, I think too many people forget that. I thought I needed to go to specsavers when I saw the 1374% APR... now I've never got a loan (can't actually, but also not short of £100 if I absolutely need it) but that seems an awful lot?!! I know loan companies have to make money and everything, and that the APR has to be high probably because of the instant turn round and that they accept people with poor credit ratings, bit still.... the people who use them are the people no one should really exploit (though they're also the people easiest to exploit).

A lady I work with.

She also goes to the cashpoint at 2am to draw out her wages before her debts can be taken from them

She had a massive payout from a relative dying a few years ago, and even that couldn't improve her money management

My best mate. She was a drug addict :(

A lot of the people I used to work with - sadly just to fund the last week of the month as they would fall short on the basics. Then because of the amount they were paying back a week would change into ten days, `2 weeks etc. etc. and they'd get stuck in a terrible spiral of endless loans until they were always burrowing and always paying interest.

Horrible organizations, horrible cycle (but still better than the real loan sharks - A colleague has seen their victims pushed into drug couriering, prostitution, hiding guns and other weapons until needed by the gangs all in lieu of the massive massive interest payments and with no real choice - and yes the real loan sharks do beat people up :( )

People like my job share colleague who are shit with money - She has just come back from 2 weeks holiday and - as the boss is away has just taken her
pay for 31st October in cash because she cannot meet her month end bills as she overspent on her holiday - her All Inclusive holiday by the way !!
Her and her DH both work, house paid for etc etc and still are always in the shit moneywise.

The interest rate isn't actually 1374%. If you borrowed £100 you would roughly hve to pay back about £130 at the end of the month, which works out at 30%. I'd love to explain to you how its worked out but its so complicated (dh just tried to explain to me and even i was a bit )

I personally would never use it but it can throw a lifeline to some who have unexpected bills etc.

I suppose if your cooker or some other vital piece of equipment breaks down, you're a single mother on minimum wage or benefits, possibly you have no choice.
What would you do OP?

desperate people with shit credit ratings like me.. although I havent used this yet and dont intend to but I can totally see why the desperate would use them. Same for Brighthouse.. if my cooker/washing machine broke tomorrow I would be first through the door at brighthouse.

Bedathogwarts I totally agree with you.. financial education at school would have gone a long way in helping me manage my money as an adult. I'm totally shit at it. I get so confused and overwhelmed with it all. It can take me two days to buy gas at the shop. I mean to, then I forget, get sidetracked, lose my card. I have adhd tendencies rather like ds

the interest level for the short amount of time is lower, what is stated is the apr = interest you would have to pay if you were to take out the loan for a whole year.

People who are rather desperate, is that not bad enough without us sneering at them as well?

i have used them as our finances just about balance and down to pennies, and the slightest thing can tip us over the edge. e.g we need £100 for something unexpected so we use that £100 however we have 3 DDs due at the end of the month and we don't have the money for them so we get a payday loan for £100 and pay back £125 if we didn't we would have £75 of bank charges for missing the DDs. seems daft not to use the. plus i usually get them for profit through cashback sites borrow £100 pay back £125 but you get £40 cashback so you're sorted and £15 up the advertised interest rate is something they have to put up but basically irrelvent as no-one borrows for a year max is 1 month.

What gets me is the woman in the advert is making out that it such a normal thing to do - that it's really no problem to pay £30 to borrow £100 for a few days. This is (to me) fooling people into thinking that there is nothing wrong in using these rip off merchants. Because yes - technically that is 30% on the amount you've borrowed - but the 1700% is the annual percentage rate (APR). Which is what you'll be paying if you can't pay back the money at the end of the short period. And £30 to borrow £100 for a few days is ludicrous!

"what should people do?" - Get some proper advice - Debt counsellor, Citizens Advice etc - there are people out there who don't have a vested interest in making money out of you.

I like Martin Lewis's website (Money savings expert) - explains most things carefully and they have good forums, budget tools etc.
Even he is campaigning for financial education in schools.