Government looks to cap payday loans: what do you think?

[KatieMumsnet]

Hi there

Just wanted to flag some promising looking news, the government's announced a plan to introduce a cap on the cost of pay day loans.

This follows long campaigns against the dodgy doings of payday loan companies - including by us, on your behest; because of the human misery caused by payday loans, reported by Mumsnet users among many others, we were the first major UK website to ban advertising by pay day lenders.

We'll be watching carefully to see how the government's plan is implemented, but meanwhile, tell us what you think?

[custardo]

through work, i helped a guy - he was looking after his kids on his own, no money, washer broke. he went to brighthouse - they quoted something ridiculous, i directed him to credit union - he got a loan for the same amount as brighthouse were charging for a washer
and
shit you not

got a brand spanking new washing machine from a normal shop and had money to take his kids on the first holiday they ever had.

[morethanpotatoprints]

cornflake

You don't need to understand very much to work out how much you will end up paying back, when taking out a pay day loan.
By definition if you have to have one you are incapable of managing your finances, if you were capable you wouldn't need one as people are usually desperate for the money, hence the ability of companies to charge a high APR.
I am not saying it is always because a person has been foolish, or that it ia always their fault, but at that time they are incapable of managing the finances they have.
I have been skint, not had money for things. We saved our £5 per week until we could afford it as we learned from an early age what a trap credit can be. I was 14 when I learned this, my dd is 9 and learning about it. We taught our ds when they were younger.
I don't have a GCSE in Maths, you don't have to have that much up top tbh.

[cornflakegirl]

I agree, no understanding of APR is necessary to know the amount you will repay on a payday loan.

I don't think that the high APR is driven just by people being desperate. It's also due to the need to cover admin costs (and make a profit) on small loans, over a short period, to people with a fairly high risk of default.

And incapable, I think, implies a value judgment on people borrowing. I suspect that in the main the users are no more stupid or careless than the general population. They just have the misfortune of being poorer.

[cornflakegirl]

Oh, and I agree with custardo - it would be brilliant if a way could be found to make credit unions more accessible.

[ThisIsMyTime]

I'm in the shit with 3 of them after turning to them to cover sickness pay at work it's a vicious circle and I've contemplated ending it twice until I went to step change who will help me turn things around I'm so scared of bailiffs cuming to my door :(