To wonder how this is legal

[Bluepansies]

I've just seen a TV ad for a company offering loans at 1035% apr. I thought the one I saw the other day that was 79% apr was bad enough but this is insane - surely you'd have to be in a pretty desperate financial situation to go for this in which case this is unbelievably exploitative. The only other reason I can think of for someone to take one out is if they were very inexperienced and/or uneducated when it comes to finances in which case it's equally exploitative.

How is this allowed?

It shouldn't be
Disgraceful

I wonder this too. I spotted an article from 2012 where the offered interest rate was 23707 apr, and another article from 2010 an interest rate of 75862 apr was offered, according to that article.

They're aimed at people who can't actually access credit elsewhere.

surely you'd have to be in a pretty desperate financial situation to go for this
Yep.

in which case this is unbelievably exploitative
I don't think these loans are designed to be held for a year. Most people might reason that, in a tight spot, paying a fiver a week to borrow a hundred for a month is a pretty decent deal. That works out at !200% APR.

I'm not necessarily defending these types of loans, and I think there are many defaulters (quite simply because a fiver a week for a hundred borrowed over a month doesn't seem like a bad term to default on) but I think the phrase "payday" loans should be borne in mind.

YANBU, there should be a cap on the amount of interest that can be charged.

Inevitably it is the most vulnerable who will be taking out these kind of loans... It amounts to little more than a tax on being poor. Sickening.

That's eyewatering.

What was the company name?

I can't remember the name of it but it featured a man folded up in a cardboard box. The 79% one was Amigo loans I think, they offer loans to people with bad credit as long as they have a guarantor. I think they're up to 5 or 10 grand so definitely designed to be held for more than a year! Awful.

It's an absolute disgrace and I wish it would be banned.

Anyone have any thoughts about microfinance in third world countries?

I've wondered that, it's smacks of legalised loan sharking, yet if have good credit you are offered 0% credit for anything up to 40 months. It's a crazy system.

They are high risk, short term loans for people who have ruined their credit ratings with conventional credit. They work in £ not %, but are obliged to advertise the %. Say costs £5 to borrow £20.

@KanielOutis

You're not making much sense.