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Challenge - Find The Highest APR On A Loan

Challenge - Find The Highest APR On A Loan

Old Dec 29th 2010, 4:59 pm
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Default Challenge - Find The Highest APR On A Loan

While I was back in the UK, there was a lot of debate in the media about the high profile of 'loan sharks' unscrupulously taking advantage of people who are in financial difficulties, and charging them exorbitant interest rates. This has become almost an epidemic in the recent recession.

Coincidentally, a company called QuickQuid have been advertising (on TV) their short-term 'payday loans' (they give you cash until you get paid, basically), and the advert unashamedly quotes a typical APR interest rate..........

Warning: when you click on the link, scroll down to the 'small print' to find the APR. Make sure you are sitting down.............

http://www.quickquid.co.uk/apr.html

Can anyone beat that?
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Old Dec 29th 2010, 5:08 pm
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Default Re: Challenge - Find The Highest APR On A Loan

Typical 2278% APR


Jeez are people just nuggets?
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Old Dec 30th 2010, 7:42 am
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Default Re: Challenge - Find The Highest APR On A Loan

Actually, their We Hope This Has Helped section pretty much clarifies the position on quoting APR's for loans over a relatively short period (10 - 30 days).

An APR is not only the interest portion of borrowing money, it is also has to include all charges, documentation fees, set up fees etc. If you borrowed 50GBP over a 12 month period, repayed 60GBP (12 months at 5GBP pm), you have paid 35% APR. Because your loan is over a really short period, the APR rockets.
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Old Dec 30th 2010, 7:45 am
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Default Re: Challenge - Find The Highest APR On A Loan

Originally Posted by TGFKASE View Post
Actually, their We Hope This Has Helped section pretty much clarifies the position on quoting APR's for loans over a relatively short period (10 - 30 days).

An APR is not only the interest portion of borrowing money, it is also has to include all charges, documentation fees, set up fees etc. If you borrowed 50GBP over a 12 month period, repayed 60GBP (12 months at 5GBP pm), you have paid 35% APR. Because your loan is over a really short period, the APR rockets.
I know - I work in the money markets and am all too aware of the effect of (a) short borrowing periods, and (b) the dangers of not meeting deadlines for repayment.

Mind you, in a case like this one, surely admin and docs charges can't be too great - I can't believe they go through a rigorous 'KYC' procedure.
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Old Dec 30th 2010, 7:49 am
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Default Re: Challenge - Find The Highest APR On A Loan

Originally Posted by The Dean View Post
I know - I work in the money markets and am all too aware of the effect of (a) short borrowing periods, and (b) the dangers of not meeting deadlines for repayment.

Mind you, in a case like this one, surely admin and docs charges can't be too great - I can't believe they go through a rigorous 'KYC' procedure.
From their repayment schedule, it would appear that it is a flat charge, the amount based upon Credit History. 10 to borrow 50 for an excellent history, up to 14.75 charge for average history
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Old Dec 30th 2010, 8:53 am
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Default Re: Challenge - Find The Highest APR On A Loan

Originally Posted by TGFKASE View Post
From their repayment schedule, it would appear that it is a flat charge, the amount based upon Credit History. 10 to borrow 50 for an excellent history, up to 14.75 charge for average history
correct - and 10GBP is hardly an excessive charge. The default / delay rate must be reasonably large too.

I think the problem is really the use of the measurement, APR.
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Old Dec 30th 2010, 9:52 am
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Default Re: Challenge - Find The Highest APR On A Loan

Originally Posted by EmiratesMillhouse View Post
correct - and 10GBP is hardly an excessive charge. The default / delay rate must be reasonably large too.

I think the problem is really the use of the measurement, APR.
Good point, but interest rates have become the accepted 'sine qua non' as a price-of-money instrument. They are meaningless over such a short period of time, but lenders have no choice.

My original point was that the debate (about how much 'loan sharks' charge) was somewhat diluted by the (legitimate) presence of QuickQuid and the like.
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Old Dec 30th 2010, 10:14 am
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Default Re: Challenge - Find The Highest APR On A Loan

but who is going to borrow 50 quid?
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Old Dec 30th 2010, 11:27 am
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Default Re: Challenge - Find The Highest APR On A Loan

Originally Posted by kittycat1 View Post
but who is going to borrow 50 quid?
you would be be surprised!

I did a job for a microfinance lender in the UK once - Average loan was something like 200 quid.

They also allowed you to buy white goods on weekly payments of 2 quid - a man would even come around to collect it - sounds great until you realise that the original loan is almost never paid off due to paying the nice mans salary!
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Old Dec 30th 2010, 11:29 am
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Default Re: Challenge - Find The Highest APR On A Loan

Originally Posted by The Dean View Post
Good point, but interest rates have become the accepted 'sine qua non' as a price-of-money instrument. They are meaningless over such a short period of time, but lenders have no choice.

My original point was that the debate (about how much 'loan sharks' charge) was somewhat diluted by the (legitimate) presence of QuickQuid and the like.
I agree - the other products that are somewhat more painful are the 'free loans' which take equity in your house - barclays did that one for a while if I remember correctly.
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Old Dec 30th 2010, 11:32 am
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Default Re: Challenge - Find The Highest APR On A Loan

Originally Posted by kittycat1 View Post
but who is going to borrow 50 quid?
My brother once borrowed 10,000 pounds off me, and never paid it back.

Then Auntie died (who adored him but hated me) and left him a lot of money, and left me nothing.

He still didn't pay me back............

Later, his business got hit by the recession, and he got into severe financial difficulties.

I own his house now...............
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Old Dec 30th 2010, 11:34 am
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Default Re: Challenge - Find The Highest APR On A Loan

Originally Posted by The Dean View Post
My brother once borrowed 10,000 pounds off me, and never paid it back.

Then Auntie died (who adored him but hated me) and left him a lot of money, and left me nothing.

He still didn't pay me back............

Later, his business got hit by the recession, and he got into severe financial difficulties.

I own his house now...............
good lad. I would have almost exactly the same (apart from lending him the 10k in the first place).
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Old Dec 30th 2010, 12:10 pm
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Default Re: Challenge - Find The Highest APR On A Loan

Originally Posted by The Dean View Post
While I was back in the UK, there was a lot of debate in the media about the high profile of 'loan sharks' unscrupulously taking advantage of people who are in financial difficulties, and charging them exorbitant interest rates. This has become almost an epidemic in the recent recession.

Coincidentally, a company called QuickQuid have been advertising (on TV) their short-term 'payday loans' (they give you cash until you get paid, basically), and the advert unashamedly quotes a typical APR interest rate..........

Warning: when you click on the link, scroll down to the 'small print' to find the APR. Make sure you are sitting down.............

http://www.quickquid.co.uk/apr.html

Can anyone beat that?
Wonga.com – they not only have an incredibly irritating advert (the one thing coming back for Christmas has reminded me is how shit a lot of the adverts are over here, adverts that make that Lifebuoy advert with those kids look like a multimillion dollar production), they also charge...

Wait for it...

2689% APR.

I'm not even going to link to the website and help their Google rank climb.

Suffice to say, a friend owes me £50. I'd rather her borrow it off me, than off one of those loansharks with a licence.
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Old Dec 30th 2010, 1:23 pm
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Default Re: Challenge - Find The Highest APR On A Loan

let us not forget... postal gold.
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Old Dec 30th 2010, 6:42 pm
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Default Re: Challenge - Find The Highest APR On A Loan

I'll lend anyone 50 quid at 10000000%APR
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