…and gazuky

There are quite a few things that make my blood boil these days. I think I’ve watched too many episodes of One Foot in the Grave. One of the things I can’t stand is when low-life companies seek to make money out of the desperate and vulnerable.

There was a bit of a furore recently over a number of loan companies advertising on Facebook who hadn’t been advertising their rates as they are legally obliged to do. Now they are toeing the line, we can all now see why they were so hesitant in revealing all.

Take ‘Logbook Loans’, for instance. They advertise unsecured personal loans on Facebook for people who have bad credit. So what rate – given that the normal APRs for unsecured loans from reputable banks are around 20-30% at the most – are these charming people charging those who are desperate to be able to afford their own car? 40% APR? No. 50%? Er – no. Surely not over 100%?

No. Try 437%.

Yes, that’s right. 437% APR typical.

The ‘typical’ part means that it is very possible some rates are even higher!! It gets even scarier if you do the maths:

Let’s say you want to borrow £1500. What can you buy for that? A second-hand Corsa? Something along those lines probably. And how much would you eventually expect to pay back over – say a year and a half? It’s not that long, so – £2000? £2500?

£4180.00

That’s after paying £53.60 a week – over £200 a month. Shocking. I wonder what the payback amount is like over longer terms? Of course, those aren’t stated on their website.

Of course this company is operating entirely legally, and is selling the loans as an ‘opportunity’ for people who can’t otherwise get credit. But surely there can be no reason at all, even if work depends on it, for going into that much debt – and paying that much over the odds – for a car.

There should be laws limiting the APR companies can charge. People take their own lives through mis-managed debt, and vulnerable people should be protected against getting themselves into severe amounts of debt to fund what they perceive as essentials.

I’ve seen other APRs quoted much higher in Facebook ads – one was over 1000%. If you see any, let me know.